Prestige Estates Q2 FY27 Earnings Call: Holds Rs. 36,000 Cr Sales Guidance, Rs. 46,500 Cr H2 Launch Pipeline

Solid Quarter with Strong Cash Generation

• Q2 FY 2026-2027 revenue from operations of Rs.2,222 crores — with EBITDA of Rs.1,088 crores and PAT of Rs.256 crores; H1 FY 2026-2027 totals were revenue Rs.5,057 crores, EBITDA Rs.2,108 crores and PAT Rs.527 crores.
• Operating cash flow of Rs.2,679 crores in Q2 and Rs.4,168 crores in H1 FY 2026-2027 — collections of Rs.5,294 crores (Q2) and Rs.10,096 crores (H1) provide cash-flow visibility per management.
• Residential sales of Rs.7,225 crores, up 20% YoY — on 5.84 million sq ft (3,910 units); H1 FY 2026-2027 sales totaled Rs.13,804 crores (11.88 million sq ft; 7,247 units).
• Average realization of Rs.12,375/sq ft in Q2 FY 2026-2027 — vs Rs.11,618/sq ft for H1 FY 2026-2027.
• Geography mix — Bangalore 41%, Hyderabad 32%, Mumbai 12%, Chennai 8%, other markets 7% (period unspecified).
• Property management & services — revenue of Rs.460 crores and EBITDA of Rs.51 crores (period unspecified).

FY27 Sales Guidance of Rs.36,000 Cr Held Despite Slow H1

• Management reaffirmed FY 2026-2027 sales guidance of Rs.36,000 crores — despite H1 FY 2026-2027 bookings of ~Rs.13,800 crores; Chairman Irfan Razack cited approvals/regulatory/RERA timelines as the gating factor and said the company will not over-promise.
• Rs.46,500 crores of launches slated for H2 FY 2026-2027 — Irfan Razack said of ~Rs.40,000 crore, at least Rs.20,000 crore should launch in Q3 FY 2026-2027 itself, though quarter-wise asset allocation is not finalized.
• Five approved projects pending only RERA clearance — Thane, Noida, two in Bangalore, one in Goa; Zaid Noman said practically all should launch in Q3 FY 2026-2027, possibly plus one more in Hyderabad.
• Q2 FY 2026-2027 launches of 3 residential projects totaling 5.91 million sq ft — GDV ~Rs.4,020 crores; H1 FY 2026-2027 residential launches of 23.14 million sq ft with GDV over Rs.16,200 crores.
• Construction commenced on 9 projects (~10 million sq ft) in Q2 FY 2026-2027 — across residential, office, retail and hospitality; H1 FY 2026-2027 launches/construction commencements totaled 30 million sq ft.
• Launch pipeline of over Rs.45,000 crores planned through FY 2028-2029 — across Bangalore, Mumbai, NCR, Chennai, Goa and Hyderabad; H2 FY 2026-2027 launches include Falcon City (Thane), Prestige Bogan Villa Gardens (Noida), Prestige Avon and Prestige Springwood (Bangalore) and Prestige Seascapes (Goa).
• No FY28 guidance yet — Irfan Razack declined to guide for FY 2027-2028, saying the company will first see how FY 2026-2027 closes.

Rs.3,000 Cr CPP Commitment for Hospitality; Tranche Mechanics Detailed

• CPP Investments committed Rs.3,000 crores for ~20% of Prestige Hospitality Ventures — first tranche of Rs.1,500 crores received in October 2026 (Q3 FY 2026-2027), earmarked for hospitality portfolio expansion and the development pipeline.
• Tranche 1 split: Rs.950 crore via secondary sale and Rs.550 crore into PHVL — balance Rs.1,500 crore expected in two tranches of Rs.750 crore each, one in ~1 year (FY 2027-2028) and the next after ~2 years (FY 2028-2029), all for hospitality growth.
• Attributable ownership of ~16% as of Q2 FY 2026-2027 — expected to move to 27% once both remaining tranches are received (~FY 2028-2029).
• FY 2026-2027 cash flow guidance of Rs.24,000-25,000 crore gross collections — with operating/free cash flows of ~Rs.9,000 crore; collections to improve QoQ after a softer Q1 FY 2026-2027, with pickup visible in Q2.
• FY 2026-2027 construction spend guided at Rs.10,000-11,000 crore — Q2 run rate of ~Rs.2,500 crore/quarter expected to continue in H2, slightly higher on large launches; business development spend guided at Rs.4,500-5,000 crore for FY 2026-2027.
• Pending hotel capex (ongoing plus upcoming hotels) of ~Rs.5,000 crore — per Zaid Noman (period unspecified); management to revert separately with stabilized hotel revenue figures.

FY29 Exit Rentals Cut; New Mall and DIAL Hotel Timelines

• Annuity estimates revised (slide 32) — exit rental estimates cut meaningfully for FY29 and marginally for FY28 vs Q1 FY 2026-2027 estimates, while the FY31 estimate was raised to ~Rs.4,900 crores; CFO Amit Mor attributed the cuts to slightly delayed approvals for a couple of upcoming-portfolio projects, stressing no construction delays in the ongoing portfolio.
• FY31 uplift of close to Rs.450 crores — from a Hyderabad (Raidur) land parcel moved from land bank into the upcoming pipeline.
• New retail asset to be branded Forum South 2 — 9.3 lakh sq ft leasable, ready with occupancy certificate; management targets market launch in 9-12 months from the Q2 FY 2026-2027 call (i.e., FY 2027-2028); expects ~Rs.130/sq ft average rentals and ~Rs.13 crore per month bottom line (income periods unspecified).
• Rs.519 crores paid for the retail asset — reflected in the balance sheet as of 30 September (Q2 FY 2026-2027); acquired post-NCLT from Dicky Fund via Glowind and Tarun Realtors; 9-12 months of work/capital needed from November 2026 to reach trading level (during FY 2027-2028).
• DIAL hotel keys to Marriott on November 28, 2026 — bookings possibly 3-4 weeks after handover (Q3 FY 2026-2027); rent expected to start fully yielding latest by April 2027 (FY 2027-2028) after an initial free period.
• Office leasing: ~1.5 million sq ft at BKC and ~400,000 sq ft at Mahalaxmi — further BKC leasing paused until top-class tenants are secured; both projects expected shaped up and completed by end of 2027 (FY 2027-2028).

Micro-Market Selectivity; NCR Expansion Gaining Traction

• No discount schemes policy reiterated — Q2 strength came from team effort, not schemes; only flexibility is staged payment plans on near-completion projects (e.g., 75% now, 25% at delivery).
• Demand is micro-market specific — Prestige Golden Grove in Hyderabad saw instant response on absent competing supply and sensible pricing; Irfan Razack flagged Hyderabad's free FSI policy meaning a lot of inventory will keep coming to market, so the company needs to be careful.
• Management "pretty confident" demand sustains over the next 2-3 years (FY 2027-2028 to FY 2029-2030) — while cautioning "things can change anytime"; launches priced to sell most inventory in the first few months.
• MMR focus on ticket sizes of Rs.2 crore and upwards — other markets priced below that given much lower land costs (period unspecified); mid-to-higher segment described as "evergreen".
• Prestige City Indirapuram (first NCR launch) sold 90%+ of inventory — three more NCR projects lined up: Prestige Bougainville (expected Q3 FY 2026-2027), Meadows and Falcon City; further NCR land acquisitions contingent on response to these three.
• No quantified annual BD spend guidance for the next 2-3 years — Irfan Razack called it "work in progress", with land to be replenished opportunity-by-opportunity "without really stretching ourselves too much".

JV Debt Clarified; Execution Hinges on Approvals

• Rs.2,400 crore is Prestige's share of debt in unconsolidated JV assets — CFO Amit Mor clarified this is not the total debt at the JV entities, out of Rs.12,000 crore referenced debt (as of Q2 FY 2026-2027).
• BKC clarification: 1.5 million sq ft leased is not ~50% of the asset — BKC X is 2.5 million sq ft and BKC Y (with an additional hotel) about 2 million sq ft, making the overall development considerably larger.
• Falcon City Thane Phase 1 approval received two days before the call — CC and RERA still pending; pre-launch survey showed a "phenomenal" response, but real demand will only be known once RERA is received and buyers pay a 10% deposit; no committed launch year for Phase 2 despite analyst questions on FY28 vs FY29.
• Park Street (Chennai) launch deferred until CEC is ready — management does not want a false start on the luxury project (timing unspecified); Chambers 51 office project confirmed for Q3 FY 2026-2027.
• Thane approvals in place with CEC construction underway — though not yet marketed; management expects good absorption once launched, with actual absorption only knowable within a few weeks of launch (Q3 FY 2026-2027).
• ESG highlights (H1 FY 2026-2027) — five-star GRESB rating with score of 99.9/100, advanced CRISIL ESG rating, and British Safety Council Sword of Honor across 4 projects.