4 days ago
Prestige Estates makes room for a better FY26 as approval delays ease
Prestige Estates Projects Ltd put up a decent show in the March quarter (Q4FY25) with pre-sales or bookings at ₹6,957 crore, up 48% year-on-year. Last quarter, it launched 14.03 million square feet (msf) spanning four projects: Prestige Suncrest and Prestige Southern Star-Ph 1 in Bengaluru, Prestige Nautilus in Mumbai, and Prestige Spring Heights in Hyderabad.
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However, Prestige still missed its full-year FY25 pre-sales target. Bookings declined 19% year-on-year to ₹17,023 crore in FY25, below the guided ₹24,000 crore. Lack of adequate new project launches due to approval delays was a dampener for Prestige during a large part of the financial year. Launches fell to 26msf in FY25 from 40msf in FY24, and project completions were tepid as well. Prestige's lacklustre performance comes at a time when other key listed developers such asGodrej Properties Ltd andMacrotech Developers Ltd (Lodha) surpassed their respective guidance, clocking impressive FY25 pre-sales.
Prestige's management is upbeat on its FY26 prospects as approvals have begun to fall in place. The company has entered FY26 with the launch of its much-awaited Indirapuram project in the National Capital Region, which has already clocked pre-sales ₹6,500 crore. It also launched 'Prestige Gardenia Estates' in Bengaluru. The company has a strong launch pipeline with projects worth gross development value or revenue potential of around ₹42,000 crore in FY26. Plus, it has unsold inventory worth nearly ₹20,000 crore. This has led the management to guide for pre-sales of ₹27,000 crore, which is around 60% more than the pre-sales achieved in FY25. In fact, pre-sales of ₹12,000-13,000 crore are expected in Q1FY26 itself.
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Major projects lined up for FY26 are Prestige Falcon City Luxe, Prestige Raintree Park in Bengaluru; Prestige Pallavaram Gardens in Chennai; Prestige Rock Cliff in Hyderabad; and Prestige Forest Hills Mulund—Phase II in Mumbai. Overall, an improvement in project completions and new launches should drive pre-sales growth in FY26, thus aiding collections, which were muted in FY25.
On the commercial side, its office portfolio exited FY25 with an occupancy of 90%. The upcoming commercial offices in BKC are likely to be completed by 2028 and pre-leasing has already started here, the management said. The upcoming office space at Delhi Airport is alreadycommitted and leased. Prestige plans to hand it over by FY26-end. The retail portfolio saw 99% occupancy levels in FY25. For its hospitality business, Prestige has filed the draft red herring prospectus for initial public offering (IPO).
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Prestige is aggressively building up its annuity portfolio and has huge capital expenditure plans with increased thrust on acquiring land for project development. Consequently, debt is inching higher and is likely to stay elevated. Net debt rose to ₹6,716 crore at Q4 FY25-end, from ₹5,960 crore in Q3 FY25, taking the net debt-to-equity metric to 0.42x from 0.37x during this time. 'Net gearing is at 0.42x, manageable, though with a large ongoing capex program (around ₹3,000-3,500 crore annual spends), alongside development business land capex ( ₹4,000-4,500 crore); we believe net debt should still rise by around ₹3,000-4,000 crore in FY26," said Jefferies India report dated 30 May. Year-on-year, Prestige's debt declined, aided by the ₹5,000 crore QIP (qualified institutional placement) issue of the company in 2024.
For the Prestige stock that has been under pressure lately, the trajectory of debt remains a key monitorable. The shares have declined by 13% so far in 2025, more than the drop in the Nifty Realty index. A meaningful improvement in pre-sales is crucial in FY26 to reverse the stock's recent underperformance.
