SBI Securities Lists 5 Reasons To Buy Mid Cap Stock For Higher Return, Target Price Rs 570

SBI Securities has listed real estate sector stock, Prestige Estates Projects Ltd in buy list and assigned a target price of Rs 570 apiece. The analyst has given a target time period of 12 months when the stock will reach the specified target price of Rs 570. SBI Securities has listed 5 strong reasons for investors to buy the stock. If you buy Prestige Estates Projects shares now, you will get a potential 22% return. Check key takeaways below:

1. Prestige Estates Projects Ltd Stock Performance & Return

The last trading price of the stock is Rs 469 apiece with an intraday jump of 0.13%. The stock's 52-week high is Rs 553 apiece and 52-week low is Rs 375 apiece, respectively. The stock has given 55% return in last 5-years, 35% return in last 3-years, and 8% return in last 1-year.

1. Strong Demand and Revenue Growth for 2QFY23

PRESTIGE registered presales of Rs 3,500 crores a growth of 66% YoY, with collections of Rs 2,600 crores. Volume-wise, gross sales were 4.6 mn sq ft, a growth of 50% YoY. The Mumbai region contributed 12% to total presales while Bengaluru contributed 75% to total presales.

3. Robust Development Pipeline

For 2HFY23, PRESTIGE has planned 10 mn sq ft of launches across Mumbai, Hyderabad, NCR, and Chennai. The company has maintained the guidance of Rs 12,000 crores of presales for FY23 v/s Rs 10,400 crores during FY22. The exit rental for Mar-23 is expected at Rs 2,200 crores in office rental and Rs 1,800 crores in retail.

4. Growing Annuity Income

PRESTIGE's rental revenue for 2QFY23 increased 6% YoY to Rs 64 crores. The company is currently constructing 28 mn sf ft of commercial projects, of which, it will deliver 5 mn sq ft across Hyderabad, Pune and Bengaluru over the next few months.

5. High Credit Rating

PRESTIGE has a superior credit rating profile, with a credit rating of ICRA A+. The company reported net debt of Rs 4,050 crores in 2QFY23, consequently a net Debt/Equity ratio of 0.41x. An increase in the number of launches may take the net Debt/Equity ratio to 0.5x in near team.

6. Healthy Cash Flows

In 2QFY23, PRESTIGE's collections stood at Rs 2,600 crores and spent Rs 1,600 crores towards construction. The company also spent Rs 1,000 crores on business development. At the current price, the stock is trading at 33.0x/26.0x of its FY23E/FY24E Bloomberg consensus earnings.

7. About Prestige Estates

Founded in 1986, Prestige Estates Projects is in the business of real estate development and leasing of residential, commercial, retail and hospitality properties.

The company has presence in 12+ cities, has 52 ongoing projects of 78 mn sq ft area and 47 upcoming projects of 79 mn sq ft area. It is pre-dominantly Bangalore based real estate player and has recently forayed into Mumbai and Hyderabad market.

Disclaimer

The stock has been picked from the brokerage report of SBI Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.