Prestige Estates Shares Tumble After Underwhelming Quarterly Financial Performance

Investors responded negatively as shares of Prestige Estates Projects Ltd. observed an over 8% drop following the release of their third-quarter earnings which did not meet market expectations. The real estate company experienced a slight 2% reduction in net profit compared to the same period the previous year, with figures standing at Rs 164.7 crore, falling short of the projected Rs 269 crore by analysts at Bloomberg.

Financial Results Fall Short

Alongside the dip in net profit, Prestige Estates also reported a 22.5% drop in revenue to Rs 1,796 crore, which was below the Bloomberg analysts' estimation of Rs 2,548 crore. EBITDA, which refers to earnings before interest, taxes, depreciation, and amortization, was down by 4%, recording Rs 551.5 crore against the anticipated Rs 717 crore. Furthermore, the margin was reported at 30.7%, which was higher than the 24.7% from the previous year but still below the forecasted 28%.

Company Outlook and Share Movement

Despite the lower earnings, Prestige Estates expressed continued commitment to project execution, punctual delivery, and high customer satisfaction. Looking ahead, the company is prepping for major projects in metro cities like Bengaluru, Mumbai, and Chennai in the forthcoming quarter, aiming to strengthen sales, improve collections, and expand their geographical footprint.

In the stock market, Prestige Estates saw its shares drop to their lowest levels since late December of the previous year, with a decrease of 8.75% early in the day, later moderating to a 3.7% loss. The downturn appeared amidst a minor 0.6% fall in the NSE Nifty 50. Despite this stumble, the stock showcased an impressive surge of 171.22% over the past 12 months. In terms of trading volume, activity hovered around 0.59 times its 30-day average, and the relative strength index was marked at 34.83.

The company still maintains positive analyst coverage, with 17 out of 20 analysts suggesting a 'buy' rating, while only two recommend a 'sell', and one maintains a 'hold'. The consensus indicates an 8.7% upside potential in the average 12-month price target for the stock.

Shares, Earnings, Estimates