According to the financial express, The Indian real estate industry is poised for remarkable growth, projected to reach a market size of $1 trillion by 2030. In 2023, it recorded $3.9 billion in investments during the first half alone, with residential sales surging by 68% year-on-year. By 2025, it is expected to contribute 15% to India’s GDP, highlighting its economic significance.
With a market capitalization of Rs 32,837.97 crore, the shares of Aditya Birla Real Estate Ltd were trading at Rs 2,939.95 per share, increasing around 0.45 percent as compared to the previous closing price of Rs 2,926.80 apiece.
Brokerage target:-
Nomura, one of the well-known brokerages globally, gave a ‘Buy’ call on the Aditya Birla Group stock with a target price of Rs 3,700 apiece, indicating a potential upside of 26 percent from Thursday’s price of Rs 2,939.95 per share.
Brokerage Rational:-
The brokerage believes the firm’s ~40-acre premium Worli property tract has significant development potential in the long run. On a conservative premise, this may result in cumulative pre-sales of Rs 40,000 crore at +40% EBITDA margins throughout the course of its existence.
The investment bank stated: “As part of the Aditya Birla Group, the company benefits from strong brand equity, and has an experienced senior management team with previous professional tenure at key competitors.”
Nomura estimated the gross development value of Aditya Birla Real Estate’s project pipeline at Rs 90,000 crore. In comparison, pre-sales have totaled around Rs 9,000 crore. As a consequence, the company has the potential to be one of India’s leading real estate players in terms of pre-sales.
Moreover, the company previously known as Century Textiles and Industries, the company has been officially renamed Aditya Birla Real Estate. The company, which formerly operated in the textile, paper, and pulp industries, entered the real estate market in 2016.
Financial performance:-
The company’s revenue saw a 28% rise, growing from ₹894 crore in Q1 FY24 to ₹1,149 crore in Q1 FY25. Net profit surged by 342%, shifting from a ₹7 crore loss to a ₹17 crore profit, reflecting strong revenue and profitability growth.
Revenue Split:-
In FY23-24, Century Textiles and Industries’s total segment revenue reached ₹4,276.70 crore in FY23-24, a 19% increase from ₹3,593.84 crore in FY22-23. The majority of revenue, 78%, came from the Paper and Pulp products segment, followed by the real estate business at 20% and with other sources contributing the remaining 1%.
Segment Highlights:-
Birla Estate’s revenue grew over 800% year-on-year to ₹338 crores in Q1 FY’25, with bookings of ₹262 crores. The company maintained strong collections of ₹488 crores and acquired major land parcels in Gurugram and Pune. Projects worth ₹12,000 crores are planned for FY’25.
In the pulp and paper segment, Q1 FY’25 saw a 6% drop in turnover to ₹786 crores. EBITDA stood at ₹65 crores with an 8.3% margin. Cost reduction initiatives were implemented, and a moderate pricing revival is expected by Q2 FY’25, alongside seasonal impacts on tissue demand.
Market outlook:-
The residential real estate market is expected to experience significant growth in the coming quarters, fueled by infrastructure development and smart city expansion. Investors continue to see the Indian real estate sector as a secure and profitable long-term investment, enhancing market confidence.
Management guidance:-
The company is confident in meeting its sales targets for the year and anticipates significant growth in presales over the next 3-5 years. Investments are being made to acquire new projects and expand capabilities, despite facing land scarcity in certain markets.
Moreover, a strong focus remains on delivering quality, enhancing customer experience, and fostering community development. Future projects, such as Century Bhavan, are under evaluation for potential development, reflecting the company’s ongoing commitment to strategic growth and long-term success in the real estate sector.
Company snapshot:-
Century Textiles & sectors Ltd. has grown from a single-unit textile company in 1987 to a commercial powerhouse with holdings in a variety of sectors. Currently, the company is a trendsetter in cotton textiles and has a strong presence in the pulp & paper and real estate industries.
Written by:- Abhishek Singh
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