A prominent real estate stock surged 10 percent in today’s trading session after Emkay Global projected a potential upside of 31 percent. The bullish outlook sparked strong investor interest, driving heavy buying activity in the counter.
During Thursday’s trading session, shares of Puravankara Ltd reached an intra-day high of Rs.306.10 apiece, hitting the 10 percent upper circuit from its previous closing price of Rs.278.30 apiece. Over the past five years, the stock has delivered over 650 percent returns.
Brokerage Overview
According to Emkay Global Financial Services, Puravankara Ltd (PL) reported subdued pre-sales performance in FY25, largely due to sector-wide delays in project approvals. Despite launching only 3.6 million square feet of new projects, the company saw a 14 percent year-on-year rise in sustenance sales, offering some relief. Collections also remained healthy, growing by 9 percent during the year.
Looking ahead, Emkay expects strong pre-sales growth in FY26 and FY27, driven by key upcoming launches, including those in Mumbai. The brokerage maintains a pre-sales CAGR estimate of 36 percent for FY25-27, with an increasing share from West markets.
With projected collections of Rs.46 billion in FY26 and Rs.63 billion in FY27, leverage is expected to remain under control. Emkay retains a ‘Buy’ rating on the stock with a target price of Rs.400, indicating a 31 percent upside while noting the stock currently trades at a 28 percent discount to its NAV.
Emkay Global values the residential business using an embedded EV/EBITDA multiple and the commercial business on a cap-rate basis. With a net debt of around Rs.35 billion (as of Mar-26E), they set a SOTP-based target price of Rs.400 and suggest a BUY on the stock. They estimate an embedded EBITDA of Rs.17.8 billion on Mar-26E with a 25 percent margin, leading to an EV of Rs.106 billion at a 6x multiple, while the stock trades at a 28 percent discount to a NAV of Rs.104 billion.
For the commercial business, Emkay Global notes a few assets under construction and the recent Hebbal land acquisition. They project cash flows till FY40 with a 4 percent terminal growth rate, apply an 8.5 percent cap rate, and discount cash flows at 11.8 percent for under-construction assets and 12.8 percent for Hebbal, arriving at an EV of Rs.22.4 billion.
Financial Performance
According to its recent financial updates, Puravankara Ltd reported consolidated revenue of Rs.542 crores in Q4 FY25, reflecting a 41.1 percent decline from Rs.920 crores in Q4 FY24, but a 70.4 percent increase from Rs.318 crores in Q3 FY25.
The company’s net loss widened significantly to Rs.88 crores in Q4 FY25, compared to Rs.7 crores in Q4 FY24. However, it showed a marginal improvement from the net loss of Rs.93 crores reported in Q3 FY25.
Written by – Siddesh S Raskar
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