National Real estate Player
Prestige Estate Projects is in the business of real estate development encompassing the development and construction of properties, leasing of office and retail properties.The Company is maintaining a leadership position in Bengaluru and has a significant presence in Hyderabad and Chennai. It has also extended operations in recent years to Kochi, Mangalore, Goa, Mysore, Pune, Mumbai, Ahmedabad, NCR and Udaipur.The Co will be starting its malls in Tier-II cities such as Ahmedabad, Amritsar, Bhubaneswar, Chandigarh, Indore, Mysuru, and Kochi. The Co will be launching Prestige Smart city on the HDFC platform for targeting mid-income buyers.he Co has signed to invest alongside its JV partner in building one of India’s largest hotel and convention centres at DIAL AeroCity in Delhi.The co is initiating office projects in popular locales and increasing its presence in Mumbai, NCR and Pune.
Keys Risk :
- Real estate cycle turn unfavourable
- Debt might go up to finance 15000 Crore capex.
- 70% of per sales come from banglore hence there is a geographical concentration risk which is slowly going away with new projects being launched in other parts of the country,
Having said the there have greate Free cash flow. AS much as 50% of FCF coming from pre sales of the residential portfolio can be used to complete the rental portfolio. Ie. This may give legs to the annuity portfolio completion.
Also the debt to Pre-sales is the right number to see. That way Debt is negligible to the size of the business.
Donny forget they have pre-sold projects in the past to black rock to clear debts too
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Keys Risk :
- Real estate cycle turn unfavourable
- Debt might go up to finance 15000 Crore capex.
- 70% of per sales come from banglore hence there is a geographical concentration risk which is slowly going away with new projects being launched in other parts of the country,
Having said the there have greate Free cash flow. AS much as 50% of FCF coming from pre sales of the residential portfolio can be used to complete the rental portfolio. Ie. This may give legs to the annuity portfolio completion.
Also the debt to Pre-sales is the right number to see. That way Debt is negligible to the size of the business.
Donny forget they have pre-sold projects in the past to black rock to clear debts too
Disc: Invested
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Concall Notes - Feb 2024 (Source:Screener Notes)
Financial Performance:
- Total sales for the 9 months at INR16,333 crores, up by 81%
- Collections up by 20%, totaling INR8,478 crores
- Average realization grown by 19% to INR10,143
- Debt equity remains at 0.6
- Unrecognized revenue of INR32,000 crores expected to have gross margins of 30-32%
- Debt outside books on JV projects around INR1,900-2,000 crores
- Other income includes REIT units, interest income, and dividends, with REIT contributing INR90-100 crores
Operational Highlights:
- Sold 16.13 million square foot of area and 8,402 units
- Launched over 30 million square foot of area in the fiscal year
- Completed 12 million square foot, crossing 300 projects totaling 180 million square foot
- Under construction and planning projects equal to 170 million square foot
- Sales already made close to INR32,000 crores of revenue
- Highest-ever launches during the fiscal year
- Prestige City format expanding to various cities
Strategic Initiatives:
- Looking to expand operations to new regions and add new projects
- Evaluating potential equity raise for hospitality portfolio monetization
Stakeholder Value:
- Strong focus on growth and creating value for stakeholders
- Continuing efforts to grow and create value for all stakeholders.
Keys Risk :
- Real estate cycle turn unfavourable
- Debt might go up to finance 15000 Crore capex.
- 70% of per sales come from banglore hence there is a geographical concentration risk which is slowly going away with new projects being launched in other parts of the country,
Having said the there have greate Free cash flow. AS much as 50% of FCF coming from pre sales of the residential portfolio can be used to complete the rental portfolio. Ie. This may give legs to the annuity portfolio completion.
Also the debt to Pre-sales is the right number to see. That way Debt is negligible to the size of the business.
Donny forget they have pre-sold projects in the past to black rock to clear debts too
4 Likes
RECENT DEVELOPMENT:
Bengaluru, April 1, 2024 - Prestige Group, one of India’s leading real estate developers, is proud to announce a significant milestone in its growth trajectory through a strategic deal with the Abu Dhabi Investment Authority (ADIA) and Kotak AIF. The INR 2,001 crores (~$240 million) deal is dedicated towards the development of residential projects in prominent locations across 4 cities in India. The collaboration with ADIA and Kotak AIF represents a considered move towards adopting strong and organic growth for Prestige Group. The deal, with its substantial size, upholds company’s vision to sustain its leadership position in the industry. It is aimed at catalysing the development of early-stage residential projects, ensuring company’s commitment to prudent expansion and diversified growth.
Bengaluru, 4th April 2024: Prestige Group, a leading real estate developer in India, is pleased to announce its latest acquisition of approximately 21 acres of prime land in Whitefield, Bengaluru. The acquired land will be planned for Residential Development spanning approximately 4 Mn Sft of developable area, comprising around 1800 apartments. The cost of acquisition is ₹450 Cr. Commenting on the acquisition, Mr. Irfan Razack, Chairman and Managing Director of Prestige Group, said, "The prime land in Whitefield, Bengaluru presents an excellent opportunity for us to expand our presence in a large IT corridor. This large-format project spans over 4 Mn Sft of developable area, with a projected Gross Development Value (GDV) of ₹4,500 Cr.” Mr. Venkat K Narayana, Group CEO of Prestige Group, said, “The project will strengthen our sales in our home market and we look forward to launching the project within the next three quarters and completing the development in 4-year time.”
Disc- Invested
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Prestige Estates Q4FY24 concall summary
- Completed 300 projects, 190 mn sft
- Ongoing 53 projects, 93 mn sft
- Upcoming 12 projects, 91 mn sft
- D/E 0.66
- Avg. Borrowing Cost 10.69%
#Q4FY24
- Sales,
21% to 4,106 Cr - Collections, 26%, 3,474 Cr
- Area sold, 34%, 4.11 Mn sft
- Launches, 78%, 9.35 Mn Sft
- Completions, 938%, 13.33 Mn Sft
- 19 units/day sold, total 1,666. Avg realization psf: 11,459
#FY24
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Highest ever Sales,
63%, 21,040 Cr -
Highest ever Collections,
22%, 11,954 Cr -
Area sold,
34%, 20.25 Mn sft -
Launches,
52%, 40.19 Mn Sft -
Completions,
63%, 25.55 Mn Sft -
28 units/day sold, total 10,068. Avg realization psf: 10,410
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Delivered 25 Mn sft of area in FY24
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75% sales (15,716 Cr) came from newly launched projects
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3,797 Cr sales came from Prestige City Hyderabad
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Co gave guidance of 19,000 sales in FY24 and achieved 21,000
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Co guided to grow sales by 25% to 30% in FY25. That is 26,000 crores of sales. Co said they will easily achieve this target and might surprise upwards.
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Co closed the deal with Abu Dhabi Investment Authority (ADIA). As part of the deal, ADIA invests 2,000 crores in 4 projects, 2 in Bangalore, 1 in Delhi, and 1 in Mumbai.
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Co tied 62 acres of land in NCR, Indirapuram. The sales potential is 10 mn sft, 10,000 crores. Co is planning to launch this in Aug or Sep subjected to approvals.
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Prestige City Hyderabad, just in four months of launch has clocked almost INR4,000 crores worth of sales
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In FY25, Co has 60,000 crores worth of launches in pipeline with land and designs sorted out. Projects are in approval stage at different levels. Co has done 21,040 Cr sales in FY24.
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Co launched 40 mn sft in FY25, out of these 31 mn sft was in residential. Remaining came from office and retail hospitality.
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There are 60,000 crores worth of pipelines and 12,000 crores worth of inventory. Total 72,000 crores. If 50% of this is sold, it will generate 36,000 crores of sales in FY25. Co should be able to easily achieve guided 26,000 crores of sales.
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Co has pipelines in Bangalore, Hyderabad, Mumbai, Pune, Goa, Chennai and NCR. NCR, there are three large projects which are under approval, one in sector 150, one in Indirapuram and the other is in KG Marg
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Co mentioned that there is very good demand for commercial real estate. 8 mn sft is under development and targeting to complete by FY26/27.
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Co mentioned that FY25 cash flows will be robust. Guided to reduce the D/E in FY25 despite of multiple new launches. Current D/E is 0.66
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Co mentioned that the hospitality demerger work is in progress and planning to finish it in FY25. Co is planning to do the hospitality division IPO after the demerger.
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Co mentioned that the Q1 will be bit soft due to elections, new launches are not happening as approvals are pending. Q2 and Q3 will be bumper quarters.
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Co said they are getting multiple project offerings from landlords but they are picking the right ones.
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EBITDA margin should remain at 20%-23%
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This year, Prestige have spent INR2,300 capex, which includes INR1,600 on commercial, retail around INR250 crores, and hospitality, INR450 crores. Co is planning to spend 2,500-3,000 crores per annum in FY25 and FY26
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Co is guided to achieve 5,000 crores of top-line office rental, and for retail, 600 crores of top-line rental by FY28
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Gross margins 30% to 35%, EBITDA margins will be around 23, the PAT margins will be in the range of 14%, 15%.
Track
Pre-sales growth
Collections
Cashflows
D/E
Launches Pipelines
Inventory
Execution and track record
Increase in Rental portfolio
Valuations
Mcap/Pre-sales
Mcap/OCF
Mcap/Embedded EBITDA
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Raising of funds by way of issuance of equity shares or other eligible securities for an aggregate amount not exceeding Rs. 5,000 Crores (Rupees Five Thousand Crores only) by way of qualified institutional placement (“QIP”) or other permissible mode in accordance with the applicable laws, subject to the receipt of the necessary approvals as may be required
monetize assets of the Hospitality segment through Prestige Hospitality Ventures Limited,
wholly owned subsidiary of the Company by way of issue of shares (through primary or secondary or both) subject to approval of shareholders, market conditions and receipt of applicable approvals. In this regard, the board has formed sub-committee to oversee and structure the process. The committee is tasked with the responsibility of ensuring compliance with all regulatory requirements, coordinating with advisors and underwriters, and making
all necessary arrangements
As per bord meeting on 21.06.2024
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