Prestige Estates - FY13 sales booking to beat guidance by ~20% - Motilal Oswal

Execution on track to meet revenue booking, collections uptick guidance

We met Prestige Estates Projects' (PEPL) management and visited key sites to get updates on the business and outlook of Bangalore real estate market. The key takeaways are:

- Despite moderation in the launch plan over 2HFY13, PEPL is comfortably poised to beat FY13 sales guidance of ~INR25b by almost 20%. 8MFY13 sales stood at ~INR22.5b.

- Execution progress steady in most annuity assets. We estimate annualized rental income to post ~35% CAGR over FY12-15E to ~INR4.6b.

- Progress in development projects are on track to meet guidance of 2-2.5x scale-up in quarterly revenue run-rate. We expect an uptick in collections run-rate to INR6b/Q.

- Upgrading our NAV-based target price by ~9% to INR195 and FY13E/14E EPS estimates by 4-8%. While the stock has already been re-rated in line with expectation, further upside hinges on strengthening of P&L and cash flow hereon. Maintain Buy.

Source : Equity Bulls

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