Aditya Birla Real Estate has come a long way from its textile roots, and Jefferies believes that transformation is now beginning to show up in the numbers.
With pre-sales scaling sharply, a sizeable development pipeline and net gearing close to zero, the brokerage sees room for the real estate business to build on its growth momentum.
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Jefferies has initiated coverage on Aditya Birla Real Estate with a ‘Buy' rating and a target price of Rs 1,880, highlighting the company's expanding pan-India footprint, Central Mumbai land bank and improving capital efficiency.
From Textile Company To Pan-India Developer
The transformation has been reflected in the company's sales trajectory. Pre-sales quadrupled to Rs 81 billion in FY25 from FY23, while 78% of FY26 sales came from outside the Mumbai Metropolitan Region (MMR).
Jefferies estimates the company's project pipeline at around Rs 500 billion, providing substantial visibility for future launches. Management is targeting more than 20% pre-sales CAGR and around 20% ROE over the next few years.
The brokerage also sees major value in the company's land bank. Central Mumbai land accounts for around 60% of NAV, while approximately Rs 330 billion of inventory remains to be monetised.
Balance Sheet Gives Room For The Next Leg
Net gearing has fallen to nearly zero, strengthening the balance sheet as the company scales its development pipeline.
The commercial portfolio could provide another source of recurring income. Management is targeting commercial rental income of Rs 10 billion, compared with Rs 1.4 billion currently.
Q1 Collections Rise, But Bookings Fall
Aditya Birla Real Estate reported revenue of Rs 188.85 crore, up 29.7% year-on-year, while total income increased 30.7% to Rs 205.72 crore. The company reported a net loss of around Rs 39 crore for the quarter.
Collections, however, rose 31% YoY to Rs 713 crore, supported by around 98% collection efficiency. Booking value declined 22.1% YoY to Rs 329 crore amid a quieter period for new project launches.
The company has also announced a Rs 2,600 crore revenue-potential project in Vashi, Navi Mumbai, through subsidiary Birla Estates.
For Jefferies, the combination of land monetisation, pan-India expansion, stronger balance-sheet positioning and rising recurring income could define Aditya Birla Real Estate's next phase of growth.
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