Accelerating pre-sales growth in FY27
About the stock: Shriram Properties (SPL) is among the top 5 residential real estate developer in south India primarily focused on the mid-market & mid-premium housing categories.
• It has established a strong presence in Bengaluru, Chennai, Kolkata and recently expanded to Pune. It has a project pipeline of more than 35 msf (16.7/18.6 msf – ongoing/upcoming) with a mix of Owned, Joint Development Agreement, Joint Venture & Development Management projects. Q4FY26 performance: SPL reported resilient sales performance for Q4FY26 and FY26. For Q4FY26 SPL achieved presales of ₹ 663 crore (vs ₹ 673 crore in Q4FY25 and ₹ 565 crore in Q3FY26). Collections came in at ₹ 511 crore up 12% YoY. FY26 pre-sales grew 3% YoY to ₹ 2354 crore. Collections grew 12% YoY to ₹ 1661 crore. On the financial side, SPL reported robust financial performance on highest ever project handovers despite e-khata and registration challenges. FY26 revenues/EBITDA/PAT up 54%/197%/30% at ₹1267/₹87/₹101 crore. EBITDA Margins expanded 330 bps to 6.9%. On the business development side SPL secured projects worth ₹ 3500 crore.
Investment Rationale
• Stepping up pre-sales growth guidance for FY27 to 40-49% YoY: SPL is targeting a robust pre-sales growth of 40-49% YoY (volume growth of 20- 33% YoY) for FY27 at ₹ 3300-3500 crore (FY26 pre-sales grew 3% YoY). It plans ~6+ msf launches in FY27 across Bengaluru (45%), Pune (28%), Chennai (20%) and Kolkata (7%), eyeing ₹ 2000+ crore from new launches. It has unsold inventory of 2.6 msf (GDV of ₹ 1710 crore) in ongoing projects and 18.6 msf (GDV of ₹ 12240 crore) in upcoming projects, scheduled to be launched over the next 4-5 years. Hence, overall, its unsold GDV potential stands at ₹ 13,950 crore, providing a strong pre-sales growth trajectory going ahead. We estimate its pre-sales to grow at 31% CAGR over FY26- FY28E to ₹ 4030 crore.
• Business development of ₹ 5000-6000 crore for FY27: SPL has secured business development of ~40 msf (GDV of ~₹ 20,125 crore) since FY19. For FY27, it plans to 7-8 msf projects with GDV potential of ₹ 5000-6000 crore. Currently, it has 7.3 msf projects worth ₹6000 crore likely addition in ~6 months and overall it has 26+ msf projects (3+/3+/20+ msf projects under closure/advanced/under active stages) business development pipeline. The company is stepping up new project additions over the next three years to achieve its internal pre-sales target of ₹ 5000 crore in FY28E (our estimate ₹ 4030 crore).
Rating and Target Price
• Shriram properties is expected to remain on a strong pre-sales growth trajectory over the next 2-3 years. We maintain our SOTP based price target price of ₹ 125 and Buy rating on the stock.
