Aditya Birla Real Estate: Emkay Sees 40% Upside in This Robust Stock
Shares of Aditya Birla Real Estate Ltd. surged as much as 7% on Monday, June 9, following a significant investment from the International Finance Corporation (IFC). Emkay Global has initiated coverage with a 'Buy' rating, predicting a 40% upside.
Aditya Birla Real EstateIfcEmkay GlobalReal EstateStock MarketReal EstateJun 10, 2025
The funds will be deployed across two major residential projects. ₹148 crore will be used for a 3.13 million sq. ft. development in Pune, and ₹272 crore for a 6.43 million sq. ft. project in Thane. Birla Estates will hold a 56% stake in the respective Special Purpose Vehicles (SPVs), with the remaining interest held by IFC.
Brokerage firm Emkay Global has initiated coverage on Aditya Birla Real Estate with a 'Buy' rating and a price target of ₹3,300 per share, implying a potential upside of 40% from the stock’s last closing price. This positive outlook is driven by the company's strong performance and future prospects.
Aditya Birla Real Estate has reported a robust booking Compound Annual Growth Rate (CAGR) of over 75% during FY20-25. The company is on track to surpass the ₹10,000 crore mark within the next two years. With a strong launch pipeline of over ₹45,000 crore, incremental business development (BD), sustained demand momentum, and the brand strength of Birla Estates, Emkay expects pre-sales to clock a 25% CAGR over FY25–27E, reaching ₹12,600 crore.
Collections from the real estate business are estimated to grow at a 32% CAGR over the same period. The sale of the paper business is expected to generate surplus cash flows, aiding in the reduction of net debt to ₹2,000 crore by FY27E, despite ongoing investments in new projects. The balance sheet is likely to remain strong, with net debt trending lower, even as the residential segment grows rapidly within a short span.
Emkay sees further scope for upward re-rating driven by sustained project additions and more asset-light platform deals such as the recent partnership with Mitsubishi over the medium term. Aditya Birla Real Estate shares ended 4.67% higher on Monday at ₹2,469.50. Despite today's gain, the stock is down 2% so far in 2025.
Aditya Birla Real Estate is part of the Aditya Birla Group, one of India's leading business conglomerates with a presence in various sectors including textiles, metals, cement, telecommunications, and more. The group's real estate arm, Birla Estates, is known for its high-quality residential and commercial projects across major cities in India. The recent investment from IFC and the positive outlook from Emkay Global underscore the company's strong fundamentals and growth potential.
Frequently Asked Questions
What is the recent investment in Birla Estates?
Birla Estates, a wholly owned subsidiary of Aditya Birla Real Estate, secured an investment of ₹420 crore from the International Finance Corporation (IFC). The funds will be used for two major residential projects in Pune and Thane.
What is the target price for Aditya Birla Real Estate according to Emkay Global?
Emkay Global has set a price target of ₹3,300 per share for Aditya Birla Real Estate, implying a potential upside of 40% from the stock’s last closing price.
What is the expected growth in pre-sales for Aditya Birla Real Estate?
Emkay Global expects pre-sales to clock a 25% CAGR over FY25–27E, reaching ₹12,600 crore, driven by a strong launch pipeline, incremental business development, and sustained demand momentum.
How will the sale of the paper business impact Aditya Birla Real Estate?
The sale of the paper business is expected to generate surplus cash flows, which will aid in reducing the net debt to ₹2,000 crore by FY27E, despite ongoing investments in new projects.
What is the significance of the partnership with Mitsubishi for Aditya Birla Real Estate?
The partnership with Mitsubishi is part of Aditya Birla Real Estate's strategy to form more asset-light platform deals, which Emkay Global sees as a driver for further upward re-rating of the stock over the medium term.
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