The brokerage highlights Aditya Birla Real Estate's transformation into a focused real estate developer following the divestment of its legacy businesses and rebranding from Century Textiles in October 2024.
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Motilal Oswal Report
Motilal Oswal initiate coverage on Aditya Birla Real Estate Ltd. with a 'Buy', setting a target price of Rs 2,275, implying a 33% upside potential from current market price of Rs 1,713.
Valuation and view
Aditya Birla Real Estate reported a strong 90% CAGR in presales over FY21-25, driven by an increase in projects under execution, geographic diversification, and premium realizations.
With a strong launch pipeline of upcoming premium projects, the company is expected to sustain momentum and post a 26% CAGR in bookings over FY25-28.
Strong presales growth will drive rapid scaling of operations across key parameters, such as cash flows, revenue, and profitability, boosting confidence in the company's execution capabilities and future growth prospects.
Based on the DCF method, we value Aditya Birla Real Estate's residential project pipeline at Rs 184 billion.
Existing commercial projects are valued at Rs 15 billion, while the 157-acre land bank is valued at Rs 39 billion.
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