Rs 300 to Rs 1,232: This realty stock turned into a multibagger in three years; buy, sell or hold?

Shares of Prestige Estates Projects Ltd have delivered multibagger returns in the long term. The realty stock nearly tripled investor wealth rising 177% in a year.  Prestige Estates stock climbed 313% in the last three years. However, the multibagger stock is down over 14% from its record high, leaving investors guessing is it the right time to buy, sell or hold the realty stock.  It scaled a record high of Rs 1,440 on January 15, 2024 and fell to a 52 week low of Rs 433.65 on April 18, 2023.

In Friday’s trade, Prestige Estates Projects stock was trading flat at Rs 1238.90 on BSE. Market cap of the firm fell to Rs 49,662 crore. Total 5,338 shares of the firm changed hands amounting to a turnover of Rs 66.36 lakh on BSE.

Prestige Estates shares have a one-year beta of 0.4, indicating very low volatility during the period. In terms of technicals, the relative strength index (RSI) of Prestige Estates stands at 56.8, signaling it's trading neither in the overbought nor in the overtrading zone.

Prestige Estates shares are trading higher than the 10 day, 20 day, 30 day, 50 day, 100 day, 150 day, 200 day but lower than the 5 day 10 day  moving averages.

Antique Broking has a price target of Rs 1,562 for the real estate stock.

"We revise sales booking estimates by 3%/ 3% over FY25–26E to Rs 231 bn/ Rs 248 bn. Reiterate BUY with a revised target price of Rs 1,562 (previously Rs 1,371), valuing the company on SoTP-based on EV/EBITDA multiple of 8x on implied EBITDA of FY26 (earlier EV/EBITDA multiple of 7x)," said the brokerage.

Motilal Oswal has a price target of Rs 1,535 for Prestige Estates stock.

"Prestige’s overall project pipeline stands at Rs 70,000 crore (including inventory at its existing projects) and can enable it to sustain its strong growth momentum in the near term. We expect PEPL’s pre-sales to rise to Rs 26,000 crore by FY26 at a CAGR of 15% over FY24-26E," said the brokerage.

“The recent land acquisition in NCR has further strengthened the project portfolio. We believe that as the company provides further growth visibility on its residential segment through the expansion of its project pipeline and advances on its key commercial projects, further value accretion is imminent. While leverage has always remained a key investor concern, the recent scale-up in its residential and commercial segment and the company’s plans to monetise its hospitality portfolio has put those concerns to rest,” added the brokerage.

The Prestige Group clocked the highest ever annual sales of Rs 21,040 crore for FY24, rising 63% YOY from Rs 12,931 crore in FY23. Q4 sales rose 21% YOY to touch Rs 4,707 crore.

Prestige Estates said the Group attained the highest ever annual collections - of Rs 11,954 crore for FY24, rising 22% YOY against FY23 collections of Rs 9,805 crore.

On the other hand, quarterly collections amounted to Rs 3,474 crore, rising 26% YOY.

The Prestige Group said it achieved the highest ever area sold in the year, totalling 20.25 mn sft, up 34% YOY. Quarterly area sold rose 3% to 4.11 mn sft.

It achieved highest ever annual launches in a year, with total project launches totalling total development area (TDA) aggregating to 40.19 million sft, in FY 24, rising  52% YOY.

On April 4, Prestige Group announced its latest acquisition of approximately 21 acre of prime land in Whitefield, Bengaluru. The acquired land will be planned for residential development spanning approximately 4 Mn Sft of developable area, comprising around 1,800 apartments. The cost of acquisition is Rs 450 crore.

Prestige Estates is one of the leading real estate developers in the country with its head office in Bengaluru.