Citing slower pre-sales growth and lower conviction, Morgan Stanley downgraded Prestige Estates to ‘Underweight’ from ‘Overweight’ and cut its target price to Rs 1,510 from Rs 1,770. The new target price reflects an 11.4% downside from the previous day’s closing price of Rs 1,705.7.
The brokerage reduced its FY25 pre-sales growth estimate to +9% YoY, down from the earlier forecast of +28%, as the company achieved only 29% of its FY25 target in H1FY25. The Relative Underweight rating is attributed to high capital expenditure on the company’s IP business and weaker presales momentum compared to its peers.
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At 10:19 am, the scrip was trading 3.5% lower at Rs 1,646 on BSE. However, on a year-to-date basis, the stock has rallied nearly 40%, while it has surged 260% in the past two years.Also Read: Adani stocks jump up to 4% after group issues clarification
In Q2 FY25, Prestige Estates Projects reported a steep 77.4% YoY decline in net profit to Rs 192.2 crore, driven primarily by a Rs 106 crore deferred tax impact linked to recent changes in the tax code, including the removal of indexation benefits on capital gains.The company’s revenue, however, edged up by 3% to Rs 2,304.4 crore from Rs 2,236.4 crore in the same quarter last year. Operating profit, or EBITDA, increased by 6.5% to Rs 631.3 crore, compared to Rs 592.5 crore a year ago, with EBITDA margin showing a slight improvement at 27.4% versus 26.5% last year.Also Read: Ola Electric climbs 6% on launch of 2 affordable scooters
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