Aditya Birla Real Estate: Why Antique upped target price on ABREL shares

Antique Stock Broking has increased the target price for Aditya Birla Real Estate (ABREL) to Rs 3,061 from Rs 2,793, maintaining a 'Buy' rating on the stock. This decision reflects confidence in ABREL's growth strategy, particularly its efforts to infuse liquidity through strategic divestments and partnerships.

Earlier this year, ABREL raised Rs 275 crore from Mitsubishi Estate for a 49 per cent stake in the Birla Evara project in Sarjapur, Bengaluru. This project, launched in the fourth quarter of FY25, received strong market response, underpinning ABREL's successful operational strategy.

In a note, Antique Stock Broking highlighted the company's focus on reallocating capital from low-growth sectors like textiles and paper to high-potential real estate ventures. "The company has been taking the right steps and ticking all the boxes," the broking firm noted, emphasising ABREL's operational efficiency and strong market response.

The divestment strategy includes selling the paper business to ITC for Rs 3,498 crore, expected to conclude in the first half of FY26. Additionally, ABREL secured Rs 420 crore equity investment from IFC, projecting additional liquidity of Rs 3,918 crore in the first half of FY26.

ABREL's pre-sales have grown significantly, from Rs 460 crore in FY20 to Rs 8,090 crore in FY25. The firm aims to reach a pre-sales run-rate of Rs 15,000 crore by FY28, signifying a compound annual growth rate (CAGR) of 23 per cent for FY25-28. "We change our pre-sales estimate for FY26/27 by 0 per cent/10 per cent to Rs 9,000 crore/Rs 12,000 crore," Antique noted.

Aditya Birla Real Estate has sold Rs 17,250 crore worth of inventory since its first project launch in the first quarter of FY20, selling approximately 73 per cent of its launched inventory. ABREL is targeting to surpass Rs 9,000 crore in revenue for FY26 and Rs 12,000 crore for FY27, aided by a robust launch pipeline and aggressive business development.

Antique Stock Broking expressed a structurally positive outlook on ABREL’s growth prospects, stating, "We continue to remain structurally positive on ABREL’s growth prospects in the medium to long term. ABREL is our top pick."

ABREL's strategic moves, particularly the paper business sale and private equity deals, are expected to optimise debt levels and maintain momentum in business development. The company is preparing for major projects, including the launch of Niyaara phase 3 in FY26, which remains a key monitorable.

These strategic initiatives underline ABREL’s strong financial position and operational efficacy, justifying Antique Stock Broking’s optimistic projection and continued recommendation of the company as a top investment option.