This Midcap Real Estate Stock Soars 215% in 3 Yrs, Declares Dividend, Buy For 40% Strong Gains

Broking firm Motilal Oswal initiates buy on Prestige Estates Projects Ltd. (PEPL) with a positive outlook. It has assigned a target price of Rs. 675/share for the stock of PEPL. According to the given target price, if you buy the stock at the current market price it can give up to 40% return. PEPL is a midcap Real Estate sector stock. It has a market capitalisation of Rs. 19,497.91 crore.

Dividend

The Board of PEPL in their meeting held on Tuesday, May 30, 2023, recommended a final dividend of Rs. 15/share i.e. 15% for the financial year 2022-23.

According to the regulatory filing by the Board of Directors of Prestige Estates Projects Ltd., "Recommended payment of final dividend @15 % (Rs.1.5 /- per share) on the equity shares of the Company for the year ended March 31, 2023, subject to approval of shareholders at the ensuing 26th Annual General Meeting of the Company."

Valuation and view

Motilal Oswal said, PEPL has scaled up its residential business remarkably to INR129b in FY23 from INR55b sales in FY21 and the management remains confident of achieving 25% YoY growth in bookings in FY24. Accordingly, we raise our FY24/FY25 pre-sales estimates by 23%/37%. While the recent stake increase in key office assets in Mumbai has resulted in an increase in net debt, we believe the enhanced cash flows will support the company in meeting its business development spending and commercial capex requirements without putting strain on the balance sheet."

It added, "Once the commercial portfolio reaches full stabilization over the next five to six years, it is expected to generate a rental income of INR40b. However, this potential income is not fully reflected in the current valuation. We reiterate our BUY rating on the stock with an unchanged TP of INR675, implying an upside potential of 40%."

Stock Outlook

The stock of PEPL is currently trading at Rs. 486/share on NSE. It recorded the 52-week low on 20 June 2022 at Rs. 379/share and 52 week high on 16 May 2023 at Rs. 520/share, respectively.
It has fallen 3.18% in the past 1 week. It jumped 19.56% in the past 3 months. It gave 8.9% positive return in 1 year. In 3 years, it gave 215.29% positive return. In 5 years, it gave 103.51% positive return.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.