India’s Prestige Estates Projects reported slowing second-quarter revenue growth on Tuesday, as delayed approvals weighed on property launches in its mainstay Bengaluru market.
The company’s revenue from operations rose 3% to 23.04 billion rupees ($274 million), compared to a 57% jump in the year-ago quarter, as the number of apartments it sold in the July-to-September period slumped 63% year-over-year.
The growth was also lower than that in the first-quarter, when Prestige’s revenues had risen 11%.
Profit slumped 77% on-year in the reported quarter, mainly on the back of a fall in other income.
For further earnings highlights, click
KEY CONTEXT
Growth in the number of apartments Prestige sold in the reported period was flat sequentially, while July-to-September was the fourth straight quarter its profit fell.
Analysts warned that launch approvals from the Bengaluru Real Estate Regulatory Authority (RERA) were delayed in the quarter, weighing on the company’s fresh launches, as well as peers Sobha and Brigade Developers.
Property launches in Bengaluru rose 7% year-over-year in the reported quarter, real estate consultancy firm Anarock data showed.
In the year-ago quarter, too, launches grew 7% in Bengaluru.
India’s housing sector has seen sustained demand for home ownership over the past few quarters, particularly for higher-margin premium properties.
PEER COMPARISON
Valuation Estimates (next 12 months) Analysts’ sentiment
(next 12
months)
RIC PE EV/EBI Revenue growth Profit growth Mean # of Stock to Div yield
TDA (%) (%) rating* analysts price (%)
target**
Prestige Estates 55.05 22.85 26.81 5.18 Buy 15 0.88 0.11
Projects Ltd
Sobha Ltd 35.19 24.12 25.02 137.12 Buy 13 0.77 0.19
Brigade Enterprises 39.41 19.47 5.41 31.61 Buy 9 0.87 0.17
Ltd
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG IBES
— $1 = 84.0330 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Pooja Desai)
