Motilal Oswal Reiterates 'Buy' on Aditya Birla Real Estate with ₹1,940 Target Price, Citing 61% Pre-Sales CAGR Over FY20–26
Analyst Reiterates Positive Stance on Aditya Birla Real Estate
Aditya Birla Real Estate (ABREL) achieved pre-sales of ₹81 billion with a 61% pre-sales CAGR over FY20–26, reflecting rapid scale-up since the company's entry into residential real estate in 2016. Motilal Oswal Financial Services issued a Buy rating on Aditya Birla Real Estate with a target price of ₹1,940, reaffirming confidence in the developer's medium-term trajectory.
Scale-Up Trajectory and Top-10 Standing
ABREL's robust scale-up has propelled it into the ranks of the top 10 developers, driven by strategic business development, timely launches, rapid asset churn, and the brand pull of Aditya Birla. The company operates across key markets of Mumbai Metropolitan Area (MMR), NCR, Bengaluru, and Pune, with eight successful project launches in FY26 supported by a 23.5% year-on-year increase in collections.
Near-Term Consolidation, Long-Term Growth
The company has entered a consolidation phase, with limited sustenance inventory and fewer major launches leading to flattish pre-sales in FY26, with pre-sales expected to remain at similar levels in FY27. However, new project additions over the coming quarters and their subsequent launches should revive growth beyond FY27, with 22% YoY pre-sales growth expected in FY28.
With only one project (INR17–18 billion GDV) added over the past 1.0–1.5 years, inventory replenishment has lagged presales momentum, though INR421 billion of inventory remains to be launched. Based on analyst checks, several deals are currently under evaluation, and the acquisition of new projects could improve medium-term growth visibility.
Financial Strength and Deleveraging
ABREL has maintained strong financial discipline and control over debt, with net debt standing at approximately INR33 billion in FY26, cushioned by an 85% CAGR in collections over FY20–26. Proceeds worth INR35 billion (pre-tax) from the paper division sale in 1HFY27 are expected to further deleverage the balance sheet, positioning the company well for its next leg of growth.
Operational Execution and Market Position
The launch of Birla Arika Phase 2 in Sector 31, Gurugram, saw approximately INR16 billion bookings with approximately 97% sold within a month, while Birla Taranya in Thane recorded approximately INR9.5 billion bookings. Additional projects launched during FY26 included Birla Pravaah in Sector 71 Gurugram, Birla Trimaya Phase 4 in Bengaluru, Birla Evara in Bengaluru, Birla Evam in Pune, and Birla Punya in Pune.
Parent Company Context
ABREL, which commenced operations in 2016 under Century Textiles' Birla Estates division, was rebranded in October 2024 following the divestment of non-core businesses such as textiles and pulp & paper. The Aditya Birla Group, with over 125 years of legacy, forayed into real estate in 2016 through Aditya Birla Real Estate Limited, leveraging brand recognition and financial stability to support residential and commercial development.