PremiumShares of Prestige Estates Projects Ltd fell 7% on the National Stock Exchange in opening deals on Wednesday, reacting to its June quarter earnings. Covid-led disruption weighed on the company's residential sales impacting its overall performance.
The Bangalore-based real estate developer reported subdued results with booking volumes at 1.1 million square feet (msf), down 60% sequentially. Sales value of Rs734 crore was down around 59% during the quarter. Overall collections stood at Rs1,023 crore, down 42% sequentially, of which the company's share was Rs827 crore.
Its rental portfolio also remained under pressure. In the June quarter, its rental income at Rs60 crore declined sequentially and annually. Consequently, the company's Q1FY22 revenue at Rs1420 crore missed analysts' expectations. Its operating performance was also poor with Ebitda falling both sequentially and annually.
What's more, the company's net debt increased sequentially by Rs860 crore to Rs2,170 crore with debt-to-equity ratio at 0.29times. Its average cost of borrowing stood at 9.8%.
Investors would reckon that elevated debt had been a key concern for the investors in this stock. On 10 March, the company concluded phase 1 of the transaction with US private equity giant Blackstone Group worth Rs7,467 crore. It should be noted that the total enterprise value of this deal is approximately Rs9,160 crore.
Post the company's March quarter earnings, the management had said that it expects the second phase of the deal to complete in July and post that it would become net-debt free. However, since the company has slew of projects lined-up in the commercial and residential segments, it would require funds and will be considering a mix of debt and equity to meet this requirement.
Analysts say, a futher update on the conclusion of this deal and status of upcoming projects will be among the key monitorabels at its earning conference call scheduled on Wednesday.
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