Prestige To Aditya Birla: These Realty Firms May Need To Ramp Up Launches To Meet FY25 Guidance

It's been a mixed quarter for real estate companies in terms of bookings and launches.

While companies like DLF Ltd., Macrotech Developers Ltd. and Signature Global India Ltd. have reported strong pre-sales growth, companies like Aditya Birla Real Estate, Prestige Estates and Sobha Ltd. need to ramp up new launches or else, they might likely fall short of meeting their fiscal 2025 guidance.

As per Nuvama, launches were subdued (down 49% YoY for top-14 developers) due to approval-related issues. However, with realisations expanding 14% YoY, third quarter pre-sales (by value) for the top 20 listed developers were up 17% YoY/39% QoQ.

Managements of the companies remained confident about a ramp-up in launches and pre-sales. Owing to low inventory levels, new launches assume great importance.

Aditya Birla Real Estate, which needs to accomplish 66.4% of it's pre-sales guidance in the fourth quarter, is optimistic on reaching the target level of Rs 7,000-8,000 crore by FY25 end.

The company expects a combination of sustenance sales and new launches to achieve the promised target. It expects to launch six projects in the fourth quarter, which includes Birla Trimaya and Birla in Sangamwadi in Pune, and others in Gurugram and Bengaluru. The launch value of these new projects is around Rs 8,000 crore, it said in its third quarter conference call.

For Prestige Estates, a key challenge this fiscal has been lack of approvals. The company expects to launch five big projects this quarter, which will help it meet its guidance for FY25.

As per Antique Stock Broking, the company is likely to miss its guidance if the launch of the Indirapuram project gets delayed.

According to the brokerage, Sobha, Kolte Patil Developers, and Arvind Smartspaces are expected to miss the guidance, whereas DLF, Macrotech Developers, Brigade Enterprises Ltd., AB Real Estate, Godrej Properties, and Sunteck Realty are expected to surpass or meet their guidance.

Notably, DLF revised its guidance to Rs 20,000 crore in the third quarter from Rs 17,500 crore, after exceeding the full year guidance in 9M FY25.

As per Antique Stock Broking, balance sheet of all the companies, except Aditya Birla Real Estate, witnessed significant reduction of debt, with aggregate net debt of the 11 companies declining 40% from the third quarter levels. This was primarily due to fund raising by some companies and healthy internal accruals.

Eleven listed companies raised Rs 21,400 crore in the last 12 months, of which, nine were through the QIP route and rest through preferential issue and rights issue, the note said.

Nuvama highlighted that developers utilised 36.5% of the collections towards land-related capex in 9MFY25 (compared with 32% in FY24 and 29% in FY23).

"Given significant financial firepower being available with developers post fund raise, we reckon business development shall remain robust over the next six–eight quarters," it added in its note.