Prestige Group Q2 PAT drops 44% as H1 cash flow hits

Prestige Group reported Q2 FY27 profit after tax of Rs 256.2 crore, down 44.04% year on year, while H1 FY27 net operating cash flow was Rs 4,168.6 crore. H1 revenue declined 2.10% to Rs 5,057.8 crore, but profit before tax fell 28.62% and investing cash outflows were Rs 4,836.1 crore.

Why did Prestige's Q2 FY27 profit fall 44%?

Prestige's Q2 FY27 profit after tax, or PAT, fell 44.04% year on year to Rs 256.2 crore as revenue, earnings before interest, tax, depreciation and amortisation, or EBITDA, and profit before tax, or PBT, also declined. Revenue was Rs 2,222.2 crore, down 17.63%, EBITDA was Rs 1,088.1 crore, down 7.47%, and PBT was Rs 364.2 crore, down 37.64%.

Prestige reported a Q2 EBITDA margin of 48.96%, a PBT margin of 16.39% and a PAT margin of 11.53%. The presentation does not provide a bridge identifying specific causes for the year-on-year declines in PBT and PAT, but it shows that the PBT and PAT reductions were steeper than the revenue reduction.

The quarterly earnings result came alongside continued project activity across four property categories. Prestige launched or commenced construction on nine residential, commercial, retail and hospitality projects in Q2 FY27 with 10.09 million square feet of developable area, and completed 5.07 million square feet; H1 completions totalled 9.44 million square feet.

How did Prestige's H1 FY27 earnings compare with last year?

Prestige's H1 FY27 revenue decline was 2.10%, while PBT and PAT fell 28.62% and 31.46%, respectively. First-half revenue was Rs 5,057.8 crore, EBITDA was Rs 2,108.2 crore, PBT was Rs 729.9 crore and PAT was Rs 527.6 crore. Reported H1 EBITDA, PBT and PAT margins were 41.68%, 14.43% and 10.43%, respectively.

The reported comparison shows that first-half revenue was closer to the preceding year's level than Q2 revenue, but first-half PAT still declined by more than 30%. H1 EBITDA margin was 41.68%, compared with 48.96% in Q2, a difference of 7.28 percentage points between the reported half-year and quarterly periods.

Which Prestige segments contributed to H1 FY27 earnings?

Prestige's residential business was the largest reported segment by H1 revenue and PAT for the half year ended 30 September 2026. Residential revenue was Rs 2,838.9 crore and PAT was Rs 242.8 crore, compared with hospitality revenue of Rs 607.6 crore and PAT of Rs 71.3 crore. The office business reported revenue of Rs 322.8 crore and PAT of Rs 83.3 crore.

Office reported the highest segment EBITDA margin at 84%, followed by retail at 60%, hospitality at 39%, residential at 25% and services at 11%. The presentation says the Others category includes the impact of Indian Accounting Standard 116, or Ind AS 116. Its segment table shows total revenue of Rs 4,735.3 crore, while the financial-performance table reports H1 revenue of Rs 5,057.8 crore; these pages do not explain the difference.

Prestige reported total capital employed of Rs 32,750.7 crore at 30 September 2026, including debt, equity and ongoing capital expenditure. Office accounted for Rs 14,956.2 crore, including Rs 10,614.9 crore on ongoing capital-expenditure projects and investments. The group reported annualised return on capital employed of 19.01%, defined as EBITDA divided by capital employed excluding ongoing projects, and annualised return on equity of 57.47%.

How did Prestige's operating cash flow fund investment and financing?

Prestige generated H1 FY27 net cash flow from operating activities of Rs 4,168.6 crore from gross operational receipts of Rs 12,206.2 crore. Development-business construction costs were Rs 5,163.9 crore, while sales, marketing and administrative overheads, landowner payments and taxes were Rs 2,873.7 crore. Q2 operating cash flow was Rs 2,679.8 crore from gross operational receipts of Rs 6,644 crore.

Investing activities used Rs 4,836.1 crore in H1 FY27, exceeding operating cash flow by Rs 667.5 crore. The largest disclosed item was Rs 2,865.9 crore for land, transferable development rights, refundable deposits and stake buybacks. Construction expenditure for retail, commercial and hospitality assets was Rs 1,970.2 crore.

Financing activities generated net cash flow of Rs 722 crore in H1 FY27 after Rs 2,013.2 crore of net debt drawn. Finance costs were Rs 961.3 crore, dividend payout was Rs 78.4 crore and other financing outflows were Rs 271.7 crore. At 30 September 2026, Prestige reported net debt of Rs 12,122.3 crore, a debt-to-equity ratio of 0.70 and an average cost of debt of 9.09%.

Residential and commercial project debt for sale represented 46% of the debt profile at 30 September 2026, followed by office at 30%, retail at 18%, rental securitisation and operating hospitality loans at 5%, and hospitality at 1%. Separately, Prestige disclosed a Rs 3,000 crore strategic investment by CPP Investments in Prestige Hospitality Ventures Limited for an approximately 27% stake, intended to support its planned hospitality portfolio and future growth opportunities.

Conclusion

Prestige's H1 FY27 results combine a modest 2.10% revenue decline with a 31.46% fall in PAT to Rs 527.6 crore, even as operating activities generated Rs 4,168.6 crore of cash. Q2 showed a sharper reduction in reported profit, while first-half investment outflows exceeded operating cash flow because of spending on land, project construction and other disclosed investments.

The next disclosed execution measures are project launches, construction and completions. Prestige had launched or commenced 30.25 million square feet and completed 9.44 million square feet in H1 FY27, while a South Bengaluru retail asset acquired after the quarter end, measuring about 9.36 lakh square feet, is expected to become operational in FY28 with estimated annual rental potential above Rs 135 crore.