Scripscan:Prestige Estates Projects Ltd
Code:533274
Cmp:123
Story:Prestige Estates Projects is a leading real estate development company based in south India. Established in 1986 it has completed 142 projects totaling to 27.09 msf. The company has a well balanced business model with projects in residential, commercial, hospitality and retail segment.PEPL currently holds development rights for 52.57 msf of developable area.Prestige largely focuses on the joint development model unlike its peers, Sobha Developers and Puravankara Projects. The company's operating margin is as low as 21% compared with its peers, who have margins of about 25%.There is a concern as the joint development model followed by the company may result in lower EBITDA margins,offsetting any possible gains of premium positioning.The company is quoting at a much higher PE compared to its peers and has a high leveraged stretched balance sheet.Further its much concentrated towards the southern part which makes one apprehensive(Bangalore and chennai contributes around 75% and 15% revenues respectievely).Consumer Demand is expected to be moderate in Bangalore as oversupply hangover still looms large on Bangalore.Real estate is reeling and with the high interest rate scenario its a hard sector to delve in.At 4000crs marketcap with 2000crs with debt its overvalued.Sell at rallies and move on to something else.
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