Soft Q1; Growth trajectory to pick up
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 (16/17.7 msf – ongoing/upcoming) with a mix of Owned, Joint Development Agreement, Joint Venture & Development Management projects.
Q1FY2 7 performance : SPL reported a steady Q1FY27, pre-sales up 10% YoY to ₹ 484 crore (0.85 msf), supported by project launches in Chennai and Kolkata. Collections increased 8% YoY to ₹ 365 crore. Revenue grew 4% YoY to ₹271 crore, with EBITDA at ₹42 crore (Flat YoY) and PAT at ₹11 crore vs ₹21 crore Q1FY27 impacted by higher finance costs. Operating cash flow came in at ₹54 crore. The net debt position was ₹432 crore with 0.3x net debt/equity. The company secured a project worth ₹ 650 crore and has 7+ msf of additional development potential under advanced closure.
Investment Rationale:
• FY27 guidance retained anticipating strong H2 : SPL retained ₹ 3300-3500 pre-sales growth (40-49% YoY) guidance for FY27 led by strong launch pipeline of ~₹ 6000 crore launch pipeline (~80% targeted in H2), which is expected to generate ~₹ 2000 crore pre-sales. Further, sustenance sales is expected to contribute ~₹ 1400-1500 crore for FY27. Its 9MFY27 launch pipeline of ~5.2+msf is well diversified across Bengaluru (50%), Pune (32%) and Chennai (17%), providing uptick in realisations (higher Bengaluru share). It has unsold inventory of 2.9 msf (GDV of ₹ 1970 crore) in ongoing projects and 17.7 msf (GDV of ₹ 11560 crore) in upcoming projects, scheduled to be launched over the next 4-5 years. Hence, overall, its unsold GDV potential stands at ₹ 13,530 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 retained : SPL has secured business development of ~41 msf (GDV of ~₹ 20,775 crore) since FY19 (Q1FY27 – ₹ 650 crore). For FY27, it retained new project additions of 7-8 msf with GDV potential of ₹ 5000-6000 crore. Currently, it has 7.3 msf projects worth ₹ 6000 crore likely addition in ~6 months and 20+ msf projects at various stages of evaluation. The company retained its FY28 mission target of presales (₹ 5000+ crore), revenues (₹ 2500+ crore) and PBT (₹ 250+ crore). Overall, it has ~₹ 14,000 crore of revenues (~₹ 4800+ crore – launched/ongoing, ~₹ 9000+ crore – Upcoming projects) to be recognised in 5-7 years.
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.
