Prestige Estates Projects 3QFY23 Pre-Sales Down 41% YoY Due To Lesser Launches

BY Realty Plus

Prestige Estates Projects (PEPL) reported 3QFY23 pre-sales of INR25.2b, in line with the estimate of INR 24b but down 41% YoY/28% QoQ due to lesser launches. Over 9MFY23 PEPL clocked bookings of INR 90b, up 27% YoY.  The sales volume declined 48% YoY to 2.9msf while blended realizations rose 23% YoY to INR 9,300 sq ft. due to higher sales in Mumbai. PEPL generated 54% of sales from Bengaluru followed by 20% and 13% contributions from Mumbai and Hyderabad, respectively.

During 9MFY23, the new launches totalled 21msf and completions were at 14.4msf. It is expected to sustain the momentum aided by 20 msf launches in 4QFY23E across key markets. The key projects that are set to launch in 4Q include Prestige City (12msf) and Prestige Clairmont (3.3msf) in Hyderabad along with Aston Park (1.35msf), Serenity Shores (1.53msf) and Lavender Fields (3msf) in Bengaluru.

Management highlighted that as of Jan’23, PEPL has surpassed its FY22 bookings of INR100b and given the strong project pipeline, it can comfortably exceed the annual guidance of INR120b.

P&L performance where revenue increased 75% YoY/62% QoQ to INR23b driven by completions worth 11msf. EBITDA rose 57% YoY to INR5.7b with a margin of 25%. PAT increased 48% YoY to INR1.28b during the quarter. Strong project pipeline to enable significant rental scale up.

Rental revenue (Office + Retail) for 3QFY23 increased 7% YoY to INR0.7b. PEPL currently has 26msf of commercial office projects under construction and barring the Liberty towers (4msf) asset in Mumbai, it is targeting to fully execute all ongoing projects by FY26E.

Additionally, PEPL also has 15msf and 5msf of upcoming project pipeline in office and retail segments, respectively, which it aims to fully develop by FY27E. Once fully executed, these assets are likely to generate rentals of INR32b (at PEPL’s share) by FY28, which is significantly higher than the current exit run rate of INR3.5b. Healthy OCF but capex to be the key monitorable.

In 3QFY23, collections from residential segment were down 6% YoY/12% QoQ to INR22b. Overall, PEPL collected INR26b (residential and annuity combined) and generated an OCF of INR9.6b for 3Q. It spent INR4b and INR6.5b towards capex and BD, respectively, resulting in a net outflow of INR1.1b in 3QFY23. 

Net debt increased marginally by 1.3b to INR41.7b with net D/E at 0.42x. For 9MFY23, PEPL collected INR79b and generated an OCF of INR27.6b. Capex of INR13b towards annuity assets along with INR25b outflow towards BD including land/TDR investments led to a net outflow of INR11b. In addition to this, PEPL also incurred an outflow of INR 5.5b as interest cost over 9MFY23. PEPL is will incur INR157b of capex towards completion of the ongoing and upcoming office projects as well as the retail and hospitality assets over next five years.

Tags : Prestige Estates Projects pre-sales launch management