“The momentum definitely can sustain. It’s all about how you strategise and how you work yourself up and bring in the pipeline,” Razack stated. He highlighted the difficulty in acquiring land and securing approvals, which are crucial for creating inventory to meet the persistent demand.
Bengaluru-based Prestige Group’s flagship, Prestige Estates Projects Ltd., has a market capitalisation of about ₹72,005 crore and has gained nearly 3% over the past year.
Addressing future growth expectations, Razack provided a tempered outlook. After surpassing sales milestones of ₹10,000 crore, ₹15,000 crore, and even ₹20,000 crore, he believes that expecting a 25-30% compound annual growth rate (CAGR) on such a high base would be a challenge. Instead, he suggested that a steady-state pre-sales growth of 10-12% annually is a more “reasonable” and sustainable target. “A fair growth between 10 to 12% on a very high base should be very reasonable to expect,” he affirmed.
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On the subject of pricing, Razack emphasised that future growth would primarily be driven by sales volume rather than significant price increases. He cautioned against unreasonable price hikes, which could become “counterproductive” by impacting affordability. While acknowledging that prices need to adjust for inflation, he stressed the importance of keeping properties within the reach of consumers. “We have to have an eye on the affordability also,” he said, distinguishing between the niche luxury market and the mid-income segment, which he identified as the core driver of volume and business.
Razack also commented on the operational challenges facing the industry. Regarding the deteriorating air quality in cities like Mumbai, he acknowledged the responsibility of developers to mitigate environmental impact. He mentioned practical measures such as dust shielding and wheel washing for trucks, calling for collective action to protect the environment.
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Furthermore, he discussed the impending impact of new labour codes, which he sees as a positive step towards formalising the workforce and improving conditions for migrant labourers. Razack projected that these codes could lead to a 10-15% increase in the labour cost component. “There will be a cost implication, but I think it is for the good… I think the cost increase on labour, just that component of labour, should be anywhere between 10 to 15%,” he concluded, viewing it as a necessary investment in worker welfare.
For the entire interview, watch the accompanying video