Expect to revert to growth path from H2
About the stock: Aditya Birla Real Estates (CENTEX), is the real estate arm of the Aditya Birla group.
• Residential portfolio is well diversified across MMR, NCR, Bengaluru and Pune. Worli comprise more than 50% of the overall portfolio GDV.
• Two operational commercial assets of 6 lakh square feet.
Investment Rationale
• Launch heavy H2 to help surpass FY25 pre-sales bookings for FY26: The company has a robust launch pipeline of ₹ 13,932 crore for FY26. Absence of new launches in H1FY26 has resulted in 22% YoY dip in pre-sales to ₹ 1312 crore. However, a strong launch pipeline for FY26, which includes key projects viz. Niyaara Tower C, Worli (₹ 4434 crore GDV), Arika, NCR (₹ 2561 crore), Punya, Pune (₹ 2286 crore) and Thane (₹ 1629 crore) is expected to help it surpass FY25 pre-sales (₹ 8088 crore, up 103% YoY) for FY26. However, for FY27, we note that it would have to launch new plot of Worli project having GDV of ₹ 14,870 crore GDV to maintain pre-sales growth momentum. As of now, the management is preparing for the said launch but it would depend on the response garnered from the expected Niyaara Tower C launch (March 2025).
• New Business Development to be key monitorable for sustainable highgrowth: The company has yet not closed any new business development in FY26 till date, although it is in advance stages with respect to ₹ 30,000 crore GDV projects across its key geographies. It expects to close FY26 with ₹ 10,000-15,000 crore GDV additions. Currently, out of its total project portfolio size of ~₹ 69,900 crore, it has sold ~₹ 18,700 crore (27%) and left with ~₹ 51,300 crore sales potential (43% Worli and 19% Thane projects share). Owing to its concentrated large size projects in two key locations, we believe it would require new business developments at diversified locations to drive sustainable high-growth over the longer term. The company has an aspiration to be the largest real estate company over the next five years.
Rating and Target Price
• The company has witnessed over 25% correction in stock price over trailing four months on account of absence of new launches, relatively softer collections and inability to conclude new business developments.
• We believe strong launch pipeline for H2FY26, expected improvement in collections from Q3FY26 and anticipated new project additions should rerate its valuation. Hence, we retain Buy on the stock with a revised SOTP based price target of ₹ 2475 (lowering NAV premium to account for delay in new Business Developments).
