Prestige Estates Q2 Sales Surge 50%: Nomura’s Top Pick for Real Estate
Prestige Estates reports a 50% YoY sales jump in Q2FY26, achieving 69% of its FY26 guidance. Nomura reaffirms its 'Buy' rating and calls it a 'Top Pick' in the real estate sector.
Prestige EstatesReal EstateNomuraSales GrowthStock MarketReal Estate NewsOct 09, 2025
Nomura has called Prestige Estates its 'Top Pick' in the real estate sector, projecting that the company could exceed its FY26 guidance of Rs 25,000-27,000 crore in presales, potentially reaching Rs 29,000 crore or more. The brokerage's positive outlook is based on the company's strong launch pipeline and consistent sales performance.
In Q2FY26, Prestige Estates sold 4.42 million square feet of space, equivalent to 2,069 units, with average realizations for apartments rising 8% YoY to Rs 14,906 per sq ft. Plotted developments performed even better, with a 43% rise in realizations to Rs 9,510 per sq ft. Collections were equally strong, totaling Rs 4,212.8 crore, up 54% YoY, and bringing H1 collections to Rs 8,735.6 crore, a 55% increase from the previous year.
Prestige Estates has achieved 69% of its FY26 presales guidance in just two quarters. Nomura's analysis suggests that the company could easily exceed its target due to a robust launch pipeline of over Rs 2,00,000 crore and strong 'sustenance sales' from its existing inventory. Chairman and Managing Director Irfan Razack highlighted the company's performance across multiple geographies, including Bengaluru, NCR, and Mumbai, attributing the success to timely delivery, prudent financial management, and a strong project pipeline.
While new launches have created significant buzz, what keeps Prestige ahead of its peers is sustained sales from ongoing inventory. Nomura pegged sustenance sales in Q2 at Rs 4,000 crore, surpassing its estimate of Rs 3,000 crore. This trend reflects a broader theme in India's property market, where top developers like Sobha and Lodha also reported strong numbers from existing projects despite muted launches. For Prestige, it indicates a strong demand base and brand recall that converts ready inventory into recurring cash flow.
Prestige Estates' strength extends beyond residential projects. The company reported gross leasing of 2.3 million sq ft in its commercial portfolio during Q2FY26, maintaining a healthy 93.4% occupancy and guiding for exit rentals of Rs 800 crore for FY26. In the retail segment, turnover stood at Rs 600 crore in Q2FY26, up 9% YoY, with occupancy at 99% and exit rentals of Rs 270 crore for the full year. These segments add a layer of predictable cash flows that complement the lumpy nature of residential revenues.
In Q1FY26, Prestige Estates reported a net profit of Rs 311.5 crore, slightly higher than Rs 307 crore in the same quarter last year, on a revenue of Rs 2,468.7 crore. The company has been gradually improving its operating leverage as projects move from launch to delivery. Nomura expects operating performance to strengthen through FY26, supported by high collection efficiency and cost control. The stock closed at Rs 1,514 on October 8, 2025, and currently trades at a 25% premium to its NAV, which still leaves room compared to peers trading between 0–100% premium.
Major projects contributing to the company's strong performance include Prestige Nautilus in Mumbai, which has been a notable success and a clear luxury proof point. The company cited strong early absorption at Nautilus, indicating demand for premium products in selective micro-markets. The Prestige City in Indirapuram (NCR) has also significantly shifted the group's geographic mix, with large launches and strong take-up in NCR during the quarter. If this market sustains, the group’s revenue mix will shift meaningfully toward the NCR corridor, with implications for pricing, delivery timelines, and future launches.
Prestige Estates' biggest near-term risks lie in execution and macro sensitivity. Any slowdown in the IT sector could hurt absorption in Bengaluru, and project handover timelines remain key for revenue recognition. Input costs and regulatory delays are other potential hurdles. However, Prestige’s wide geographical spread and balanced project mix provide a cushion that most developers lack.
Looking ahead, with Rs 29,900 crore worth of launches planned for the remaining three quarters of FY26, Prestige’s target to hit or exceed Rs 29,000 crore in full-year presales seems achievable. Nomura’s projections suggest the company could beat guidance by 10–27%, depending on conversion rates. The company has repeatedly flagged approvals as the key operational risk, with permits, buyer acceptance, and practical completion remaining concerns.
Frequently Asked Questions
What was Prestige Estates' sales performance in Q2FY26?
Prestige Estates reported presales of Rs 6,017.3 crore in Q2FY26, marking a 50% year-on-year increase.
Why did Nomura reaffirm its 'Buy' rating for Prestige Estates?
Nomura reaffirmed its 'Buy' rating and target price of Rs 1,900 per share due to the company's strong launch pipeline and consistent sales performance, projecting presales of Rs 29,000 crore for FY26.
What are the key growth drivers for Prestige Estates?
Key growth drivers include new launches, strong 'sustenance sales' from existing inventory, and robust performance in both commercial and retail segments.
What are the potential risks for Prestige Estates?
Potential risks include execution delays, macroeconomic sensitivity, input costs, and regulatory delays. However, the company's wide geographical spread and balanced project mix provide a cushion.
What are the major projects contributing to Prestige Estates' success?
Major projects include Prestige Nautilus in Mumbai and The Prestige City in Indirapuram (NCR), both of which have seen strong early absorption and performance.
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