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We attended the Prestige Estates Projects Ltd.’s analyst meet in Mumbai where it showcased its roadmap for the next five years. The company has achieved Rs 90 billion presales as of nine months-FY23 and has guided for Rs 120 billion of presales by FY23 and Rs 250 billion by FY26.
This is expected to be achieved on the back of a strong launch pipeline of 73 million square feet for the next two years across geographies with 55/15% (including 44 msf of ongoing) earmarked for Bengaluru/Mumbai.
Apart from residential, Prestige Estates is eyeing Rs 30 billion of annuity income by FY27/28 on the back of ongoing and upcoming projects of 41 msf/7 msf in commercial and retail portfolios resp.
The overall capex requirement for Prestige Estates, thus, is Rs 170 billion (Rs 157 billion yet to be spent), most of which will be incurred over the next five years.
40% of free cash flow from residential sales i.e. Rs 80.8 billion is earmarked for capex requirements and 60% is earmarked for business development and other segments like data centres and warehousing.
Rs 15 billion will be funded from lease rentals, leaving Rs 74.8 billion which will be funded via debt. As a result, net debt which as of Dec-23 stands at Rs 41.7 billion is expected at Rs 11.7 billion by FY28 with net debt/equity at 0.47 times.
Prestige Estates is strategising to enter new markets such as the NCR (first project launch expected in H1 FY24) and Pune; It is also looking to bring Prestige City format in Hyderabad and Goa in FY24/FY25 respectively.
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