HDFC Securities has upgraded Prestige Estates Projects to Buy from Neutral with target Rs 275 against current market price Rs 232.

Commenting on the investment rationale, the stock broker said,"Prestige Estates Projects (PEPL) delivered a solid operating performance in FY14 despite a challenging macro with a core operating cash flow surplus of Rs 11.7 billion. However, it was offset by net outflows of Rs 7.4 billion in FY14. Consequently, net debt increased by Rs 7.7 billion YoY to Rs 28.1 billion in FY14 (net D/E of 0.9x)."

"However, with the recent round of fund raising of Rs 6.1 billion, PEPL is well placed to pursue its growth plans over FY15-17E across businesses. We expect PEPL to post strong growth in collections in FY15E to Rs 30 billion from Rs 24.8 billion in FY14. We roll forward our valuation to FY16E basis with a NAV of Rs 275 a share factoring in dilution from recent QIP. We believe that any correction of over 10% in the stock price presents an attractive entry point," it said.

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