Nomura Bullish on Prestige Estates: A Pan-India Growth Strategy and Solid Upside Potential
Nomura has initiated coverage on Prestige Estates with a 'Buy' rating, citing the company's robust pan-India growth strategy and strong financial stability. The brokerage sees a potential 17% upside in the stock price, driven by strong pre-sales and a diverse portfolio.
Prestige EstatesReal EstateNomuraStock MarketCommercial Real EstateReal Estate NewsSep 17, 2025
At 9:53 AM, Prestige Estate’s share price was trading 0.34 per cent higher at ₹1630.25 per share. In comparison, the BSE Sensex was up 0.29 per cent at 82,623.09. Year-to-date (Y-T-D), Prestige Estate shares have slipped 3.5 per cent, as compared to Sensex’s rise of 4 per cent.
Nomura’s analysis shows that Prestige Estates’ pan-India growth strategy is superior to peers, and a strong scale-up is likely, particularly in Mumbai and the Delhi National Capital Region (NCR), driven by both mid-income township and luxury projects. The company has also guided for FY26E pre-sales of ₹25,000–27,000 crore, but brokerages expect the developer to surpass estimates with pre-sales of about ₹29,000 crore (70 per cent year-on-year (Y-o-Y)), 10 per cent higher than guidance.
The company delivered ₹12,100 crore of pre-sales in Q1FY26 alone, and has a launch pipeline of 29 million sq. ft. (msf) with a Gross Development Value (GDV) of ₹29,900 crore in the remaining nine months. Even if only 70–80 per cent of the launch target is achieved, pre-sales from launches could generate ₹9,000–11,000 crore, on top of ₹20,000 crore of available inventory.
Superior execution will help scale Prestige Estate’s annuity and hotel Earnings before interest, tax, depreciation and amortisation (Ebitda) 4-5x over the next 4-5 years, according to Nomura. In the commercial segment, the company expects exit rentals to grow from ₹820 crore in FY26 to ₹385 crore by FY30E. Of this, the brokerage estimates ₹2,200 crore will come from assets in BKC and Mahalaxmi, where the company had a strong start to preleasing.
In the hotel segment, the management expects scope to expand from 1,200 rooms in FY25 to 2,400 in FY27E as high-profile assets in Delhi Aerocity go on stream. Separately, Prestige Estate has the strongest project lineup in the commercial and retail segments as compared to its peers.
The brokerage expects the company to generate annual operating cash flows (OCF) of ₹7,000–8,000 crore, sufficient to fund ₹3,000–3,500 crore annuity capex and ₹4,000–5,000 crore growth capex each year. Net debt and leverage ratios are seen remaining stable, with upside support from a potential listing of the company’s hospitality subsidiary.
Nomura sees Prestige Estate valuations as cheap, given the stock currently trades at a 40 per cent premium to net asset value (NAV), lower than Godrej Properties at 108 per cent. Analysts argue valuations are undemanding given the company’s growth trajectory. Downside risks include a slowdown in the Bangalore residential market or weaker-than-expected leasing momentum in annuity assets.
Frequently Asked Questions
What is Nomura's target price for Prestige Estate Projects stock?
Nomura has set a target price of ₹1,900 for Prestige Estate Projects stock, implying a 16.9 per cent upside from its current price.
What are the key drivers of Prestige Estates' growth strategy?
Prestige Estates' growth strategy is driven by a pan-India expansion, particularly in Mumbai and the Delhi National Capital Region (NCR), with a focus on both mid-income townships and luxury projects.
What are the expected pre-sales for Prestige Estates in FY26E?
Prestige Estates has guided for pre-sales of ₹25,000–27,000 crore in FY26E, but brokerages expect the company to surpass this with pre-sales of about ₹29,000 crore.
How does Nomura view Prestige Estates' annuity and hotel Ebitda growth?
Nomura expects Prestige Estates' annuity and hotel Ebitda to grow 4-5x over the next 4-5 years, driven by strong execution and a robust project lineup.
What are the potential risks to Prestige Estates' growth?
Downside risks include a slowdown in the Bangalore residential market or weaker-than-expected leasing momentum in annuity assets.
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