Raymond Realty shares fall 4%; buy stock for 25% upside, says Anand Rathi

Raymond Realty Ltd shares fell 4% in Thursday's trade, even as Anand Rathi initiated coverage on the stock with a 'Buy' rating and a target price of Rs 879 apiece, implying around 25% upside from the current market price. The domestic brokerage sees the realtor transitioning from a Thane-led developer into an asset-light Mumbai Metropolitan Region (MMR) platform, supported by a development potential of around Rs 52,000 crore.

The portfolio comprises around Rs 25,000 crore of development potential from Raymond Realty's owned land in Thane and another Rs 27,000 crore across eight joint development agreements (JDAs). Anand Rathi highlighted the company’s ability to selectively secure mature, execution-ready opportunities, which can shorten the time between signing and project launch while allowing it to scale across Mumbai without acquiring land.

Raymond Realty shares touched a low of Rs 676.10, down 3.74% from the previous close of Rs 702.40. The stock opened at Rs 705.25 and touched a high of Rs 705.60.

Thane cash engine, JDA growth driver

According to Anand Rathi, the strategy is already ahead of schedule, with the contribution of JDAs to bookings increasing from 22% in FY25 to 54% in FY26 and 64% in Q1FY27. This has already crossed the company’s 50% target a year ahead of schedule. The brokerage sees Thane as the company’s cash engine and the JDA portfolio as its growth engine, with the combined portfolio expected to generate annual cash flows of around Rs 6-7.5 billion. It forecasts bookings and collections to grow at a CAGR of around 24% and 46%, respectively, between FY26 and FY29.

The brokerage also highlighted Raymond Realty's execution capabilities, aided by its manufacturing-led model and mechanised and standardised construction processes. TenX Habitat was delivered two years ahead of RERA timelines, while The Address by GS Tower B was completed 18 months ahead of schedule.

Raymond's around 100-acre JK Gram land bank in Thane carries approximately Rs 250 billion of development potential, of which around Rs 85 billion is yet to be launched. Anand Rathi estimates the low-cost legacy land supports project margins of more than 25% and annual cash generation of around Rs 4.5-5 billion, providing a funding base for the company's JDA expansion.

Debt to rise as JDA portfolio expands

The brokerage said the Rs 270-billion JDA portfolio spans the BKC ring, Sion-Wadala, Mahim and other MMR micro-markets. Upcoming Mahim launches in FY27, followed by Kandivali and Parel in FY28, are expected to require approval, corpus and construction capital, although the projects do not involve land-purchase costs. Anand Rathi estimates debt to rise from Rs 1,010 crore in FY26 to Rs 2,010 crore by FY29E, with debt-to-equity peaking at around 0.7 times, below management’s 1x threshold.

On valuation, Anand Rathi noted that the stock has corrected sharply from its listing price, with its one-year forward price-to-book multiple falling from around 4.2x to about 1.2x amid macro headwinds and near-term cash flow concerns. The brokerage values the identified development portfolio at around Rs 31 billion and assigns another Rs 2,800 crore as terminal value for the continuing development franchise beyond the current pipeline. It said further value creation will depend on sustained JDA additions, collections and project execution. Key risks include delays in launches, rising competition and higher debt.