Motilal Oswal Initiates AB Real Estate Coverage with 'Buy' and Rs 1920 Target

REAL-ESTATE
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AuthorIshaan Verma|Published at:
Motilal Oswal Initiates AB Real Estate Coverage with 'Buy' and Rs 1920 Target
Overview

Motilal Oswal has launched coverage on Aditya Birla Real Estate (ABREL) with a 'Buy' recommendation and a Rs 1,920 price target, forecasting a 21% potential upside. While ABREL's fourth-quarter presales dipped 24% year-on-year to INR 42.9 billion, this met expectations. The brokerage noted strong booking performance from recent project launches and highlighted ABREL's strategy to build its annuity portfolio for future cash flow stability.

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Strong Bookings from New Projects Boost Momentum

The brokerage highlighted strong booking performance from new launches such as Birla Arika P2 in Gurugram, which saw approximately INR 16 billion in bookings with 97% sold within a month, and Birla Taranya in Thane, recording about INR 9.5 billion. These successes, coupled with the launch of six more projects/phases during FY26 across Bengaluru, Pune, and Gurugram, effectively supported presales momentum.

Overall fiscal year 2026 presales stood at INR 81.4 billion, which was broadly flat year-on-year and in line with Motilal Oswal's estimates. This stability across a diverse project pipeline indicates consistent demand for ABREL's offerings.

Annuity Business Builds Long-Term Stability

Aditya Birla Real Estate's strategic focus on sharply ramping up its annuity portfolio is a key positive. This initiative is designed to provide significant cash flow stability post-FY30. Building a consistent stream of rental income from commercial or retail assets can cushion the company against the cyclical nature of residential property development.

Analyst View: Why Motilal Oswal is Bullish

Motilal Oswal's confidence in ABREL stems from its execution on new projects and its strategic expansion of recurring revenue streams. The brokerage's 'Buy' rating and Rs 1,920 target reflect an expectation of a 21% upside, driven by these growth engines and the company's focus on financial resilience.

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