Aditya Birla Real Estate pipeline expansion sets up pre-sales growth from FY28E

Investment View and Business-Development Outlook

In its August 24, 2026 company update on Aditya Birla Real Estate (ABREL), Emkay Research believes the company is entering a strong business-development phase. The broker retains its BUY recommendation and Rs 1,750 target price, expecting a replenished project pipeline and improved balance-sheet capacity to position ABREL for higher pre-sales from FY28E.

Emkay expects business-development additions of more than Rs 150 bn in the remaining FY27. These additions could support a recovery in launches and sales after a period constrained by limited available inventory.

Cash-Flow Visibility and Balance Sheet

A key positive is the consummation of the paper-business sale in August 2026. The transaction, signed in March 2025, has generated Rs 33 bn of cash proceeds, with the remaining consideration to be received later.

Emkay estimates that ABREL also has surplus cash-flow visibility of about Rs 26 bn from ongoing projects and approximately Rs 69 bn of unsold ongoing inventory. The resulting Rs 95 bn of cash-flow visibility over the next three to four years is expected to fund new projects while helping the company retain a lean balance sheet.

Emkay forecasts net debt to reduce from Rs 34.38 bn in Q1 FY27 to Rs 11.96 bn in FY27E.

Project Pipeline and Launch Portfolio

ABREL signed a Navi Mumbai society-redevelopment project with gross development value (GDV) of Rs 26 bn in August 2026. The company also has advanced-stage opportunities across Mumbai, Noida, Bengaluru, Gurugram and Pune. The Noida opportunity has GDV above Rs 55 bn, Bengaluru above Rs 35 bn and Pune above Rs 20 bn. The total existing business-development pipeline is Rs 600 bn.

ABREL's total project portfolio, including ongoing projects, FY27 launches and the future pipeline, has estimated GDV of Rs 738.5 bn and saleable area of 34.6 million square feet.

Its FY27 launch pipeline comprises Rs 96 bn of GDV and 3.3 million square feet, including Birla Niyaara Tower C in Worli, Birla Taranya in Thane, Khar redevelopment, Birla Navya in Sector 63, Birla Punya and Birla Evam.

Pre-Sales Execution and Growth Outlook

Emkay highlights ABREL's demonstrated sales execution. Pre-sales grew from Rs 19.1 bn in FY22 to Rs 80.9 bn in FY25 at a 62 per cent CAGR, while cumulative bookings since entry into residential development in FY20 reached around Rs 257 bn. About 76 per cent of launched inventory has been sold.

Actual FY26 pre-sales were broadly flat at Rs 81.4 bn. The broker forecasts approximately Rs 80 bn of pre-sales in FY27E because business development has been muted and saleable inventory limited.

The non-fructification of the Noida Sector 150 deal, delayed approval for a Delhi project and delay in completion of the paper-business sale had restricted inventory availability. Emkay expects newly acquired projects to enter the launch cycle from FY28E, forecasting pre-sales of Rs 106.9 bn in FY28E and Rs 150 bn in FY29E, in line with management's FY29 ambition.

Financial Estimates

Emkay's consolidated estimates project a recovery in revenue, EBITDA and profitability from FY28E, alongside a sharp improvement in EBITDA margins.

Leasing income is expected to remain steady, with FY27E net leasing income of Rs 1.39 bn.

Valuation and Target Price

Emkay's Rs 1,750 target price is derived through a sum-of-the-parts valuation. The broker values the residential business at 6 times September 2028 embedded EBITDA of Rs 29 bn, using a 25 per cent embedded EBITDA margin.

The valuation also applies a 7.0 per cent capitalisation rate to the commercial portfolio, includes Rs 35 bn for the paper-business sale and deducts Rs 34 bn of net debt.

The target represents a 26 per cent premium to Emkay's NAV estimate of Rs 1,389 per share, compared with the stock trading at about a 1 per cent premium to NAV.

Key Risks

• Delays in approvals.
• Failure to close or execute the advanced business-development opportunities.
• Continued constraints on launch inventory.