Aditya Birla Real Estate FY27 launches and business development support growth outlook

Investment View and Target Price

ICICI Direct Research retains its BUY rating on Aditya Birla Real Estate (ABREL, CENTEX) and raises its target price to Rs 1,800. The constructive thesis is centred on a sizeable FY27 launch and sustenance sales pipeline, an expected acceleration in business development and the balance-sheet flexibility created by the divestment of the paper and pulp business.

ABREL is the Aditya Birla group's real estate arm, with a residential portfolio across MMR, NCR, Bengaluru and Pune. Worli accounts for more than 50 per cent of portfolio GDV. The company also has two operational commercial assets totalling 6 lakh square feet.

Q1FY27 Financial Performance

Reported Q1FY27 performance was muted, with pre-sales affected partly by cancellations at Birla Niyaara, Arika and other projects. Three of the four cancelled units had been rebooked and were being resold at higher prices. Gross Q1FY27 sales exceeded about Rs 700 crore.

Pune contributed 36 per cent of Q1FY27 pre-sales, or Rs 119 crore, followed by MMR, Bengaluru and Delhi-NCR. Despite the decline in pre-sales, collections and leasing revenue recorded strong year-on-year growth.

FY27 Launch Pipeline and Sales Outlook

The broker highlights an FY27 launch pipeline of Rs 9,596 crore GDV and sustenance sales potential of Rs 6,917 crore, implying a total pre-sales pipeline of more than Rs 16,500 crore.

Management did not provide FY27 pre-sales guidance because project approvals may affect launch timings. However, it reiterated its aspirational FY29 pre-sales target of Rs 15,000 crore. Management expects RERA approval for Birla Niyaara by the end of Q2FY27 and an early-Q3FY27 launch, with carpet-area realisation of about Rs 1,00,000 to Rs 1,20,000 per square foot.

Business Development and Balance Sheet

Business development is an important monitorable and a prospective post-FY27 growth driver. ABREL secured a Navi Mumbai joint-development redevelopment project with Priyanka Group, estimated at Rs 2,600 crore GDV, with 1 million square feet of saleable area and a 90 per cent economic interest. Launch is expected in Q2FY28.

Management targets Rs 10,000 crore to Rs 15,000 crore of FY27 business development while pursuing Rs 60,000 crore of potential projects. The ITC transaction concluded on August 1, 2026, and ABREL received Rs 3,325 crore, or 95 per cent of the consideration, from the paper and pulp divestment. ICICI Direct says this has made the company almost net debt zero and better positioned to fund new developments.

Commercial Development

Commercial development is another longer-term driver. Management plans to begin construction of a 1.3 million square feet Worli commercial tower in Q4FY27, with stabilised annual rental potential of about Rs 800 crore. It also plans 5 lakh square feet of commercial space at Taranya, Thane.

FY27 construction capex is expected at Rs 1,200 crore to Rs 1,300 crore.

Sum-of-the-Parts Valuation

ICICI Direct values ABREL on a sum-of-the-parts basis. Residential projects are valued on project NAV, commercial assets at a 7.5 per cent capitalisation rate, the paper and pulp business based on the ITC deal, and the land bank at current land prices.

Key Risks

• Project-execution risk
• Macroeconomic risk
• Regulatory risk