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INVESTMENT INSIGHTS

Check Before You Invest : Aditya Birla Real Estate Ltd

BSE: 500040 NSE: ABREL ISIN: INE055A01016
  |   Sector:  Construction & Infrastructure   |   Industry:  Construction - Real Estate

Snapshot

Q.1 Which industry/sub-sector does Aditya Birla Real Estate Ltd belong to?
Aditya Birla Real Estate Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Construction - Real Estate segment.
Q.2 Is Aditya Birla Real Estate Ltd a good quality company?
Aditya Birla Real Estate Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Aditya Birla Real Estate Ltd undervalued or overvalued?
Aditya Birla Real Estate Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 108.94 48.64
Price to Book 2.99 2.94
Price to Sales 53.94 3.09
EV to EBITDA 48.12 22.66
Q.4 Is Aditya Birla Real Estate Ltd a good buy now?
Aditya Birla Real Estate Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd revenue growth is -30.7% for FY-2025, which is above its 5-year CAGR of -37.63%, indicating faster growth.

Q.2 Gross Profit margin of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Gross profit margin which is the profit after deduction of direct costs, is 65.6% for FY-2025, which is above its 5-year median of 17%, indicating increasing margins.

Q.3 Operating Profit Margin of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 55% for FY-2025, which is above its 5-year median of 17.91% indicating increasing margins.

Q.4 Net Profit Margin of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Net Profit Margin is -4.66% for FY-2025, is below its 5-year median of 4.84%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 65.6 17
Operating Profit Margin (%) 55 17.91
Net Profit Margin (%) -4.66 4.84

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Return on Asset is -0.15%, which is below its 5-year historical median of 2.78%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Return on capital employed is 2.01% for FY-2025, which is below its 5-year historical median of 7.5%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 11.25%, indicating value preservation.

Q.7 Return on Equity (ROE) of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Return on equity is -0.35% for FY-2025, which is below its 5-year historical median of 5.18%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Cash conversion cycle is 2466 days, above its 5-year historical median of 80 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.03 0.42
ROE (%) -0.35 5.18
ROCE (%) 2.01 7.5
Cash Conversion Cycle 2466 days 80 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Debt-to-Equity ratio is 0.88, which is above the industry average of 0.23, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Aditya Birla Real Estate Ltd?
Aditya Birla Real Estate Ltd Debt to cash flow from operations is -5.42, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Aditya Birla Real Estate Ltd?

Q.1 Promoter shareholding and pledge status of Aditya Birla Real Estate Ltd?
Promoters hold 50.21% of the Aditya Birla Real Estate Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Aditya Birla Real Estate Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Aditya Birla Real Estate Ltd vs industry peers?
Aditya Birla Real Estate Ltd revenue CAGR is -37.63%, compared to the industry median CAGR of 0.00%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -30.7 0
Gross Profit Growth (%) -41.9 14.9
Operating Profit Growth (%) -46.6 10.4
Net Profit Growth (%) -106.8 17.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.03 0.1
ROE (%) -0.35 1.36
ROCE (%) 2.01 3.88
Cash Conversion Cycle (days) 2466.07 439

Valuation & price assessment

Q.1 Stock return of Aditya Birla Real Estate Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 7.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 7.8% 20.1% 16.1% -40.7%
Q.2 Valuation ratios of Aditya Birla Real Estate Ltd vs historical?
The current P/E ratio of 108.94 is higher than its historical median of 48.64, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 108.94 48.64 33.43
Price to Book 2.99 2.94 1.53
Price to Sales 53.94 3.09 5.23
EV to EBITDA 48.12 22.66 14.43

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