There were many positives in the December quarter earnings of Bengaluru-based Prestige Estates Projects Ltd. Among the key highlights were highest ever quarterly sales of Rs4,270 crore and record-high collections of Rs2,430 crore. This robust performance is attributed to good response to the company's newly launched projects in Bengaluru and Hyderabad and decent sales momentum in its ongoing projects in these regions.

In a post-earnings conference call with analysts, the company's management said it expects to close FY22 with pre-sales of Rs10,000 crore.

Although its net debt increased on a sequential basis due to investment in land acquisition and approval costs, the company's management said that it will use net proceeds from the Blackstone deal to pay some portion of debt and it is expected to reduce the gross debt by Rs625 crore in 4QFY22. In Q3FY22, net debt stood at Rs4,172 crore compared to Rs3,090 crore in 2QFY22.

While all is well for now, going ahead, the success in its newly ventures market of Mumbai Metropolitan Region (MMR) will be a crucial factor for the Prestige stock.

"Consummation of second phase of Blackstone deal and Startech deal would further infuse liquidity into the system and de-leverage the balance sheet. However, successful execution of Mumbai projects continues to be the key," analysts at Antique Stock Broking Ltd said in a report.

They further add, "While MMR is a lucrative market, it is also one of the most difficult markets with unique real estate landscapes from land dispute and complex rules governing land use and development perspective; and Prestige's geographic expansion into MMR is rather aggressive." So, analysts caution that any significant delay in the planned projects could weigh in the company's growth.

Sharing an update about its Mumbai foray, the management said that its project Jasdan Classic has been launched and till date sold 12 units valued at IRN0.7bn. The company expects to launch projects in Pali hills, Mulund and Marine Lines in April 2022. So far, the company's total investment in MMR projects is Rs2500 crore, the management said. Overall, the company would be launching 30 million square feet in the next 12-15 months.

As far as its partnership with DB Realty is concerned, the Prestige management said that it has five deals with DB for its projects located at Marine Lines, BKC 1&2, Mahalaxmi and Delhi Aerocity. The Prestige management said that money from family office in DBR to ensure Prestige-DB projects at entity level are not stuck.

Investors would remember that DB Realty was recently in the news after Godrej Properties Ltd called off its partnership with the company for slum rehabilitation project.