PRESTIGE ESTATES SHARE PRICE: POSITIONAL TRADING

Once Peter Lynch said, “The key to making money in stocks is not to get scared out of them”. 

So, abiding with this quote we’re back with an interesting article wherein we would do a root cause analysis of Prestige estates share price to confirm whether this stock can be in our watchlist or not.  

BUSINESS ANALYSIS 

Prestige Estates share has a diversified business model which is across office, retail, residential and hospitality segments, it also has operations going on in 12 key locations of India. 

With an investment of around ₹ 70 Cr, Prestige Estates has planned to expand its partnership with co-working operator Awfis and are going to establish 6 more centers across major cities. 

The company is founded in 1986 and had a turnover of ₹ 3,518 Cr in the financial year 2015. 

Due to the vision of CMD Irfan Razack and marshaled by his brothers Rezwan Razack and Noaman Razack, the company has built a strong footprint in the real estate business. 

The company has finished 247 projects which covers around 134 million sq. Ft area which is a stat from 30th June 2020. It also has 45 ongoing projects and holds a land bank of 262 acres. 

 The company is eyeing at ₹ 10,000 Cr sales booking by FY25 which is a great vision and is expected from the 5th largest listed developer. 

Prestige Estates is expecting Bengaluru to give them around ₹ 4,500 Cr of bookings, Hyderabad ₹ 1,500 Cr, Mumbai ₹ 2,000 Cr, Chennai and Noida ₹ 1,000 Cr each. 

Currently the company is experiencing a pickup in all segments.  

Three new projects in Mumbai are launched by the company which would be specifically in Mulund, Byculla and Bandra areas. 

To grow its rental portfolio, the company has also started a fresh round of capital expenditure of ₹ 3,500-4,000 Cr over FY22-25. 

In between Sept 2021 and Mar 2022, residential launches of 12-15 msf are lined up in certain areas of South India, Noida (NCR), and Mumbai. 

In Q2-2021, the company sold 3.54 million square feet area as compared to 1.77 million square feet area which was in the corresponding period of the previous year. 

To build a footprint in the country’s commercial capital, Prestige estates has bought a 2.16-acre land parcel in Byculla locality for ₹ 185 Cr. 

The company is planning to grow its annuity portfolio by ₹ 2,800 Cr which is a key focus area for Prestige Estates CEO. 
For creating logistics and ware housing spaces, Prestige office ventures has acquired a 70% equity stake in Shipco infrastructure. 

KEY PRODUCTS/REVENUE SEGMENTS 

SALE OF COMMERCIAL FLATS. 

SALE OF SHOPS AND PLOTS. 

PROPERTY DEVELOPMENT. 

SALE OF SERVICES. 

OTHER SERVICES. 

PROJECT MANAGEMENT FEES. 

MAJOR PROJECTS DEVELOPED BY THE COMPANY INCLUDE: 

Prestige Acropolis 

Prestige Ozone 

The Forum mall 

Forum Value Mall 

The Collection, UB City 

Prestige Golfshire 

Prestige Shantiniketan 

Prestige Lakeside Habitat 

FINANCIAL KEY METRICS 

The Market Capitalization of Prestige Estates share is ₹ 18,851 Cr. 

The price to earnings ratio of the Prestige Estates share is 47.8 which is higher to the industry price to earnings ratio of 33.7. 

The Prestige Estates share price has a return on capital employed of 12.3% which shows that the company is providing a good return on the capital invested and is better than FD. 

The return on equity of Prestige Estates share price is 6.49% which is also decent as per the stock’s valuations. 

The debt-to-equity ratio of Prestige Estates share price is 0.84 which is a need of their business model. Being in real estate business the company needs to take debt for land acquisitions and property development. 

FINANCIAL ANALYSIS      

Figures in Rs. Crores 

Quarterly Results	Mar 2020	Jun 2020	Sep 2020	Dec 2020	Mar 2021	Jun 2021	Sep 2021
Sales	1,982	1,274	1,875	1,848	2,268	1,416	1,344
Expenses	1,491	836	1,352	1,411	1,718	1,086	956
Operating Profit	491	438	523	436	550	330	389
OPM %	0	0	0	0	0	0	0
Other Income	35	23	42	81	1,562	58	48
Interest	258	247	244	241	258	132	180
Depreciation	177	164	166	140	122	113	114
Profit before tax	90	50	154	136	1,732	143	142
Tax %	0	1	0	0	0	0	0
Net Profit	15	2	60	59	1,336	57	76
EPS in Rs	0	0	1	1	33	1	2

For the quarter ended 30-9-2021, Prestige Estates share noted a sale of ₹ 1,344 Cr which is less by 28% from Sept-2020. 

The operating profit of Prestige Estates share was ₹ 389 Cr in the last quarter ended 30-9-2021. 

The Net profit of Prestige Estates share was ₹ 76 Cr in the quarter ended 30-6-2021. 

Figures in Rs. Crores 

Balance Sheet	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Sep 2021
Share Capital	375	375	375	375	401	544	401
Reserves	3,825	4,040	4,358	3,852	4,959	6,274	6,347
Borrowings	5,374	5,739	7,416	8,487	9,272	3,840	5,648
Other Liabilities	6,886	6,676	6,754	15,720	14,844	15,935	15,708
Total Liabilities	16,460	16,830	18,902	28,433	29,476	26,450	28,104
Fixed Assets	932	3,622	5,135	6,732	8,986	3,780	4,349
CWIP	982	1,795	2,508	1,645	2,143	2,740	3,096
Investments	3,296	355	435	778	789	907	1,012
Other Assets	11,250	11,058	10,825	19,277	17,558	19,023	19,647
Total Assets	16,460	16,830	18,902	28,433	29,476	26,450	28,104

For quarter ended 30-09-21, the reserves in the company have increased which is a good sign as investors seem to be interested in this stock. 

From the previous quarter (Mar-2021), the borrowings have increased but considering the overall average value it seems to be quite lesser. 

SHARE HOLDING SYNOPSIS 

Figures in % 

Share Holding	Mar 2020	Jun 2020	Sep 2020	Dec 2020	Mar 2021	Jun 2021	Sep 2021
Promoters	65.48	65.48	65.48	65.48	65.48	65.48	65.48
FIIs	29.42	30.11	29.66	29.45	28.9	28.15	25.31
DIIs	3.86	2.62	2.91	2.94	3.6	3.93	5.68
Public	1.24	1.79	1.95	2.13	2.01	2.44	3.53

Promoters have maintained their position which is great positive for Prestige Estates share price. 

DIIs have increased their stake in quarter ended 30-09-21 to 5.68% from 3.93%. 

Retail investors are also very much interested in this stock. 

This is a brief overview of the financials of Prestige Estates share which show cases the dominance in their respective market. 

Now, let’s deep dive into the technicalities of Prestige Estates share price. 

TECHNICAL ANALYSIS 

CHART PATTERN ANALYSIS 

If we take a closer look at the chart in a daily time frame, the share price is trading a rectangular channel which is consolidating from a long time. 

This time we’re keeping a short-term view for this stock and hence a short target is shown in the below image. 

As per the current chart, a breakout is achieved on closing basis and a rally is likely to take place in upward direction. 

A good target of 10% can be easily achieved if an individual makes a position in this stock. 

The Prestige Estates share price on 23^rd December 2021 is ₹ 471. 

MOVING AVERAGE 

For Prestige Estates share price analysis, we are taking 9 days and 21 days moving averages. 

As per the current chart, the 9 days moving average is crossing the 21 days moving average which is a good indicator to enter in this stock. 

Blue line shows the 21 days moving average and the red line indicates the 9 days moving average.

RELATIVE STRENGTH OF THE STOCK 

In daily timeframe, relative strength of the stock is positive. 

This indicator helps to identify the health of the stock and its positiveness makes the conviction more stronger. 

Image source: Tradingview.com

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