Stock idea: This real estate developer is up 64% from April low; short-term gains likely

Prestige Estates Projects, a Bangalore-based real estate developer, has received a couple of analyst updates recently, with Axis Securities joining the bandwagon, suggesting a 'Buy' on the stock with a target of Rs 1,865 within the next 3-6 months.

ICICIdirect on Monday gave a positional call on the stock, with a 14-day target of Rs 1,808, advising traders to keep stop loss at Rs 1,604.  Besides, CLSA in its weekly note on June 13 said its analyst Kunal Lakhan maintained 'Outperform' rating on Prestige Estates. Despite larger operations against peers like Macrotech Developers Ltd and Oberoi Realty Ltd, the stock trades at a significant discount (FY26E EV/cash Ebitda of 3 times against 9-22 times for peers), which he viewed as unwarranted.

On Tuesday, Prestige Estates Projects rose 1.4 per cent to hit as high of Rs 1,723.55. The stock is already up 64 per cent from its 52-week low of Rs 1,048.30 hit on April 7, 2025, on BSE. 

Prestige has guided for presales of Rs 25,000-27,000 in FY26, in line with CLSA's expectations. Prestige expects to clock presales of Rs 12,000-13,000 crore in 1QFY26. 

"We believe the company should be able to achieve/surpass this guidance given its planned launch pipeline with a GDV of Rs 42,000 crore and unsold inventory of Rs 20,000 crore. We believe its strong growth guidance for FY26 allays concerns over the miss on its FY25 guidance," CLSA said.

In a note today, Axis Securities said Prestige Estates aims to offset the muted FY25 performance in FY26, with a robust launch pipeline of Rs 42,000 crore combined with an existing inventory base of Rs 21,000 crore. The brokerage believes Prestige is well-positioned to achieve a 65 per cent YoY growth in pre-sales to Rs 28,000 crore, as it recommended a 'Buy' on the stock with a target of Rs 1,865 per share, implying an upside of 10 per cent.

Prestige Estates launched projects totalling 14 million square feet, including two major projects, Prestige Southern Star and Prestige Spring Heights, each covering 5 million square feet as compared to 10 million square feet in 9MFY25. 

Its pre-sales for FY25 stood at Rs 17,000 crore, missing its earlier guidance of Rs 24,000 crore but in line with Axis Securities' expectations post Q3FY25. 

Prestige has guided towards a launch pipeline of GDV Rs 42,000 crore while having an unsold inventory of Rs 20,000 crore. It has also guided towards a pre-sales of Rs 27,000 crore, of which Q1FY26 is expected to contribute Rs 12,000 crore on the back of the recent three Mumbai launches. This shows a good upcoming FY26 on the back of spill-over launches and a lower base. 

The company showed an occupancy level of 90 per cent for its office segments and a strong 99 per cent for its retail presence, Axis Securities said. While the company saw decent pre-sales despite delayed launches, its collections remained subdued. 

The reported collections for Q4FY25 of Rs 3,155 crore showed 9 per cent de-growth YoY. This was mainly impacted due to launches happening at the far end of March 2025, and hence could not translate into collections. Prestige expects this spill over to happen in Q1FY26. The collections for the year stood at Rs 12,084 crore, flat YoY.