Prestige Estates Shares In Focus As Nomura Initiates Coverage With 'Buy' — Check Target Price
Nomura believes Prestige's superior execution should help scale up its annuity model and hotel Ebitda four to five times over the next four to five years.
Nomura has initiated coverage on Prestige Estates Ltd., issuing a 'buy' rating and a target price of Rs 1,900, which implies a potential upside of nearly 17% from Tuesday's closing price.
The brokerage firm cited Prestige's strong execution, expansion beyond Bengaluru and a growing annuity-plus-hotel portfolio as key growth drivers for the company going forward.
Headquartered in Bengaluru, Prestige Estates has been stepping up its presence in cities such as Mumbai and Delhi by launching large-scale townships.
Nomura believes the company's superior execution should help scale up its annuity model and hotel Ebitda four to five times over the next four to five years.
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The brokerage added that Prestige Estates' valuation also seems attractive, noting that the company trades at a 40% discount to net asset value compared to peers such as Godrej Properties.
"We believe Prestige is doing all the right things — transforming itself into a pan-India player," the note said.
Nomura also expects Prestige Estates to reach pre-sales of about Rs 29,000 crore and beat guidance by 10%. The company recently recorded Rs 12,120 crore in pre-sales in the first quarter of FY26.
Despite this aggressive expansion, however, Nomura expects Prestige Estates' net debt to equity ratio to remain stable around 0.5 times, boosted by strong cashflow and potential fundraising from completed assets.
Shares of Prestige Estates opened at Rs 1,654 and are trading with gains of almost 1% in trade on Wednesday.
On a year-to-date basis, Prestige shares have fallen 3%. The stock has fallen 14% over a one-year period as well and is currently trading at a relative strength index of 52, which suggests neutral market sentiment.
A total of 19 out of 21 analysts tracking the company have a 'buy' rating on the stock; one recommends a 'hold', while one recommends 'sell', according to Bloomberg data. The 12-month analysts' consensus target price implies an upside of 15%.
