Built on strong foundations…
About the stock: Shriram Properties (SHRPRO) 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 about 36 msf (17.4 msf/18.5 msf – ongoing/upcoming) with a mix of Owned, Joint Development Agreement, Joint Venture & Development Management projects.
Investment Rationale
• Strong unsold residential project portfolio of ~₹ 13,429 crore: SPL has a strong project portfolio of 35.9 msf having an aggregate gross development value (GDV) of ₹ 20,170 crore. As of December 2025, it has 17.4 msf of ongoing projects of which it has unsold inventory of 3.4 msf (GDV of ₹ 1759 crore). Further, it has upcoming projects of 18.5 msf (GDV of ₹11670 crore), scheduled to be launched over the next 4-5 years. Hence, overall, its unsold GDV potential stands at ₹ 13,429 crore, which would be sold over the next 4-5 years, providing it a strong pre-sales growth trajectory going ahead. We estimate its pre-sales to grow at 21% CAGR over FY25-FY28E to ₹ 4030 crore.
• Kolkata land resolution unlocks value equivalent to current MCap: SPL has amicably settled long-standing dispute with the Bengal government related to 315 acres land by conveying 42 acres to the government and settling payment obligations of ₹ 259 crore with nil cash outflow. As of now, it has ongoing projects aggregating to 5 msf (~48 acres) and has received approvals for ~16 acres land parcel. Going ahead, it plans development of ~5-6 msf (utilising ~45 acre) with potential NAV value of ~₹ 400 crore. About ~45 acre is unusable (water bodies). Thus, the balance 118 acres land has an estimated market value of ₹ 708 crore (at ~₹6 crore/acre). Thus, total value from Kolkata land is ₹ 1100+ crore, which is almost equivalent to its current market capitalisation of ₹ 1160 crore.
• Stepping up business development to drive pre-sales growth over FY26E-FY28E: SPL has secured business development of ~40 msf (GDV of ~₹ 20,000 crore) since FY19. It has ₹ 4500-5000 crore GDV addition target for FY26 across Bengaluru, Pune and Chennai. For FY27, it plans to 7-8 msf projects with GDV potential of ₹ 5000-6000 crore. Currently, 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
• We value SPL on SOTP basis with valuation methodology for its residential businesses and land bank. We have valued its residential vertical by calculating project-wise NAV discounting net post-tax operating cashflows at 14% WACC rate. We value its Kolkata balance land parcel at market value. Consequently, we arrive at our SOTP based price target price of ₹125. We initiate with a Buy rating on the stock.
