Shriram Properties launch pipeline underpins strong pre-sales growth trajectory through FY28E

Investment View and Valuation

ICICI Securities retains its BUY rating on Shriram Properties Ltd. with a target price of Rs 125 per share. The positive view is supported by the company’s extensive launch pipeline, prospective business development and expected acceleration in pre-sales during H2 FY27.

Shriram Properties is a South India-focused residential developer operating in the mid-market and mid-premium categories. It has a presence in Bengaluru, Chennai and Kolkata, and has recently expanded into Pune. Its project pipeline exceeds 35 million square feet, comprising 16 million square feet of ongoing projects and 17.7 million square feet of upcoming projects across owned, joint-development, joint-venture and development-management structures.

Sum-of-the-parts valuation

Q1 FY27 Performance

Shriram Properties reported a soft Q1 FY27, although launches in Chennai and Kolkata supported growth in pre-sales. Pre-sales increased 10 per cent year on year to Rs 484 crore, or 0.85 million square feet, while collections rose 8 per cent year on year to Rs 365 crore.

The company spent Rs 88 crore on business development during the quarter and secured a North Bengaluru project with estimated gross development value of Rs 650 crore and saleable area of 0.8 million square feet.

Launch Pipeline and Pre-sales Outlook

Management retained its FY27 pre-sales guidance of Rs 3,300-3,500 crore, implying 40-49 per cent year-on-year growth. ICICI Securities expects the anticipated H2 FY27 acceleration to be driven by a launch pipeline of approximately Rs 6,000 crore, around 80 per cent of which is targeted for H2 FY27.

The broker expects approximately Rs 2,000 crore of pre-sales from launches and Rs 1,400-1,500 crore from sustenance sales. Nine projects with 5.93 million square feet of saleable area are planned over the nine months of FY27 across Bengaluru, Pune and Chennai.

The higher Bengaluru share of the launch pipeline is expected to improve realisations. ICICI Securities estimates pre-sales to grow at a 31 per cent CAGR over FY26-FY28E to Rs 4,030 crore.

Inventory and Business Development

Shriram Properties has 2.9 million square feet of unsold inventory in ongoing projects, with gross development value of Rs 1,970 crore. Upcoming inventory adds 17.7 million square feet and gross development value of Rs 11,560 crore.

The total unsold gross development value potential is therefore Rs 13,530 crore, with launches planned over four to five years. Management retained its FY27 business-development target of seven to eight million square feet and gross development value of Rs 5,000-6,000 crore.

Projects covering 7.3 million square feet and worth approximately Rs 6,000 crore are likely to be added within about six months. More than 20 million square feet of additional projects are under evaluation.

Kolkata Monetisation Opportunity

Kolkata provides an additional monetisation opportunity, with Shriram Properties holding more than 100 acres of monetisable land in the region and approvals for 2.3 million square feet of apartments. Branded plots launched in Q1 FY27 achieved 55 per cent bookings within one month.

Management estimates Kolkata land-bank sales of Rs 1,200-1,400 crore over five years. It also retained its FY28 objectives of pre-sales above Rs 5,000 crore, revenue above Rs 2,500 crore and PBT above Rs 250 crore, with an approximately 10 per cent PBT margin targeted by FY28E.

Key Risks

• Inability to acquire new residential projects.
• Delays in under-construction residential projects.