Realty firm Prestige Estates Projects Ltd reported a significant decline in profitability for the second quarter of FY27, with net profit falling 44% year-on-year to ₹256 crore compared to ₹457 crore in the corresponding period last year, according to the company's quarterly results. The company's revenue declined 15% to ₹2,060 crore from ₹2,432 crore in the year-ago quarter, and sequentially fell 23% from ₹2,675 crore in the June quarter. Despite the revenue decline, the company managed to improve its operational efficiency through strict cost controls.
The company demonstrated strong operational performance with EBITDA increasing 1.8% year-on-year to ₹926 crore, compared with ₹910 crore in the year-ago quarter, as reported by CNBC TV18. More significantly, EBITDA margin expanded to 45% from 37% in the corresponding period last year, indicating effective cost management strategies. This margin expansion helped cushion the impact of lower property sales and soft quarterly revenue performance.
Despite the profit decline, Prestige Estates showed robust sales momentum with sales bookings rising 20% year-on-year to ₹7,225 crore in Q2FY27, according to the company's operational update. The company had previously announced plans to launch residential projects worth around ₹40,000 crore in the second half of FY27, which would be approximately 2.5 times the launch value recorded in the first half. This strong sales performance suggests continued demand for the company's projects despite challenging market conditions.
The company demonstrated effective cost control with total expenses declining 12.5% year-on-year to ₹1,860 crore in the second quarter, compared with ₹2,126 crore in the year-ago period, as per the company's results. On a sequential basis, expenses fell 24% from ₹2,460 crore in Q1FY27, indicating sustained focus on operational efficiency. This expense management, combined with revenue decline, contributed to the company's ability to maintain profitability despite challenging market conditions.
The company has shelved plans for an initial public offering (IPO) of its hospitality arm, Prestige Hospitality Ventures, which was expected to raise up to ₹2,700 crore, citing strategic considerations and uncertain market conditions. Shares of Prestige Estates Projects Limited ended at ₹1,632.45, down by ₹54.40, or 3.45%, on the BSE following the results announcement, according to CNBC TV18. The stock decline reflects investor concerns over the significant profit decline despite the company's ability to maintain and improve its operational margins through cost control measures.
