Equirus has initiated coverage on Aditya Birla Real Estate Ltd. with a 'long' term rating, highlighting the company's strong position to capitalise on the current real estate upcycle. The brokerage has set a sum-of-the-parts-based target price of Rs 3,076 for March 2026.
Aditya Birla Real Estate has demonstrated growth, achieving a 90% pre-sales compound annual growth rate over FY21-FY25. This rapid expansion has positioned ABREL "amongst the top-5 residential developers in a short span", Equirus noted.
The company is poised for continued growth with a robust launch pipeline and new business development additions ranging from Rs 15,000 crore to Rs 20,000 crore annually. Management is targeting a 20-25% pre-sales growth over the mid-term, the brokerage said.
ABREL's financial position is set to be bolstered by the monetisation of its paper business, which is expected to net Rs 1,100 crore-Rs 1,200 crore in proceeds. Additionally, the company aims to scale up its annuity income from Rs 140 crore currently, to over Rs 750 crore over the next 4-5 years, Equirus said.
"With Aditya Birla's parentage, a high-calibre leadership team, strategic diversification, and a robust balance sheet, we believe ABREL is well-positioned to ride the current upcycle and gain market share across key metros," the report said.
Despite the positive outlook, Equirus cautions about potential risks including a slowdown in the real estate cycle, regulatory challenges, slower-than-expected execution, and higher-than-expected commodity prices.
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