Nomura has initiated a “Buy” rating on Aditya Birla Real Estate (part of Century Textiles and Industries Ltd.), setting a target price of Rs 3,700, implying a 29% upside in the stock price from current levels. The brokerage firm believes that all the necessary components are in place for Aditya Birla Real Estate (ABRE) to become one of the top five real estate players in India.
Nomura has pegged the cumulative Gross Development Value (GDV) of ABRE’s project pipeline at over INR 900 billion, with ABRE’s share at INR 765 billion. To date, pre-sales have reached INR 90 billion. The firm anticipates pre-sales growth of over 87% year-on-year in the fiscal year 2025 forecast (FY25F) and 33% year-on-year in FY26F.
The real estate segment is expected to be operating cash flow (OCF) positive from FY25F and free cash flow (FCF) positive from FY27-FY28F. Nomura also notes that the net debt to equity ratio is expected to peak at a comfortable 1.1x, compared to 0.5x in FY24. This financial stability further supports Nomura’s optimistic outlook for Aditya Birla Real Estate.
