Brigade Enterprises share price jumps nearly 8% after Kotak updrades the stock
Brigade Enterprises share price: Kotak Securities upgraded Brigade Enterprises stock to an 'add' from a 'reduce' with an unchanged target price of ₹1,025.
Brigade Enterprises share price: Rising for the fourth consecutive session, Brigade Enterprises share price jumped almost 8 per cent in morning trade on BSE on Friday, March 22. Brigade Enterprises share price opened at ₹906.30 against its previous close of ₹904.90 and touched its intraday high of ₹974.35 in Friday's trade so far. Brigade Enterprises stock traded 6.60 per cent up at ₹964.60 around 10:45 am.
The stock witnessed strong traction after brokerage firm Kotak Securities upgraded the stock to an 'add' from a 'reduce' with an unchanged target price of ₹1,025, citing the company's business prospects remain strong.
"We upgrade Brigade Enterprises to 'add' from 'reduce' with an unchanged fair value of ₹1,025, as the stock has corrected 16 per cent since our downgrade likely on concerns of a potential ban on construction activity in Bengaluru, owing to the local water crisis," Kotak said.
"While the water crisis may get worse off going into the summer season before some respite in monsoon, underlying business prospects remain strong for Brigade with strong performance across business segments," the brokerage firm added.
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Brigade Enterprises share price hit its 52-week high of ₹1,107.65 on BSE on February 7 this year. It has been experiencing some profit booking since then. At the current market price of ₹974.35, the stock is down about 12 per cent from its 52-week high within a span of about one-and-a-half months.
According to Kotak Securities, despite strong growth prospects across business segments, Brigade Enterprises share price currently trades at six times adjusted EV/EBITDA on FY26E earnings.
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Kotak sees value in this stock and believes the current weakness in the stock is a good opportunity to add it.
"We do concede the risk of a temporary ban on construction activity in Bengaluru, though believe that the onset of monsoon will likely address the situation, while the government projects would help structurally solve the water crisis in Bengaluru. Accordingly, we use the current weakness in stock performance as an opportunity, and upgrade the stock to 'add'," said Kotak.
Meanwhile, Brigade Enterprises in a BSE filing on March 20 said that the rating agency ICRA had "assigned a long-term credit rating of ICRA AA- for the enhancement in bank facilities by ₹500 crores (an increase from ₹2,500 crore to ₹3,000 crore). The outlook for the rating is stable."
Moreover, the company added that ICRA had further "confirmed that the long-term rating of ICRA AA- with a stable outlook and short-term rating of ICRA A1+ assigned to the ₹2,500 crore existing captioned bank facilities remains the same."
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