Prestige Estates shares rise 2% as Q2 pre-sales, collections beat Morgan Stanley estimates

Prestige Estates Projects Ltd shares rose 2% on Wednesday morning after Morgan Stanley said the company's pre-sales and collections for the September quarter beat its estimates. The brokerage also highlighted a higher FY27 pre-sales target, supported by strong sales momentum and sustained demand across projects.

In its October 13 research note, Morgan Stanley said Prestige Estates reported pre-sales of Rs 7,200 crore in the second quarter of FY27, up 20% year-on-year and 10% sequentially. Collections rose 26% year-on-year to Rs 5,290 crore, driven by higher sustenance sales, particularly from the company's Golden Grove project in Hyderabad, which has a total gross development value (GDV) of Rs 9,500 crore. The brokerage noted that Rs 3,000 crore worth of sales had been recorded at the project in the first quarter.

Prestige Estates Projects shares touched a high of Rs 1,503.50, up 1.5% from the previous close of Rs 1,481.30.

Morgan Stanley said Prestige Estates had raised its FY27 pre-sales target to Rs 36,000 crore, implying 20% year-on-year growth. However, achieving the target would require pre-sales of Rs 22,200 crore in the second half of the financial year, or approximately Rs 11,100 crore per quarter. The brokerage cautioned that this would not be easy, even with a second-half launch pipeline worth Rs 48,800 crore.

For the third quarter, Prestige Estates plans to launch Chambers 51 Worli, an office project with a GDV of Rs 7,700 crore, and a project in Kolshet, Thane, with a GDV of Rs 6,000 crore, according to Morgan Stanley's note.

The brokerage retained its Overweight rating on the stock and a price target of Rs 2,050. It also highlighted the importance of a significant increase in investment property rental income, particularly in the second half of FY28 and FY29, as a factor supporting earnings and valuation.