Jefferies has initiated coverage on Aditya Birla Real Estate with a 'Buy' rating and target price of ₹1,880, highlighting the company's expanding pan-India footprint, Central Mumbai land bank and improving capital efficiency. According to reports from Jefferies, the brokerage believes the transformation from textile company to pan-India developer is now showing up in the numbers, with pre-sales scaling sharply and a sizeable development pipeline providing substantial visibility for future growth. The latest coverage comes as the company's Q1 earnings and sales, reported on August 13, exceeded Bloomberg estimates, reinforcing the positive outlook. As per latest reports, the target price of ₹1,880 implies a 34% upside from current levels.
The transformation has been reflected in the company's sales trajectory, with pre-sales quadrupling to ₹81 billion in FY25 from FY23. As reported by Jefferies, 78% of FY26 sales came from outside the Mumbai Metropolitan Region (MMR), demonstrating successful geographic diversification. The brokerage estimates the company's project pipeline at around ₹500 billion, providing substantial visibility for future launches, while management is targeting more than 20% pre-sales CAGR and around 20% ROE over the next few years.
Jefferies sees major value in the company's land bank, with Central Mumbai land accounting for around 60% of NAV, while approximately ₹330 billion of inventory remains to be monetised. According to reports from Jefferies, net gearing has fallen to nearly zero, strengthening the balance sheet as the company scales its development pipeline. The commercial portfolio could provide another source of recurring income, with management targeting commercial rental income of ₹10 billion, compared with ₹1.4 billion currently.
Aditya Birla Real Estate reported revenue of ₹188.85 crore, up 29.7% year-on-year, while total income increased 30.7% to ₹205.72 crore. As reported by the company, the company reported a net loss of around ₹39 crore for the quarter. Collections rose 31% YoY to ₹713 crore, supported by around 98% collection efficiency, though booking value declined 22.1% YoY to ₹329 crore amid a quieter period for new project launches. The company has also announced a ₹2,600 crore revenue-potential project in Vashi, Navi Mumbai, through subsidiary Birla Estates.
