Brokerage sees 18% upside in Brigade Enterprises, do you own it?
1 min read 28 Mar 2023, 10:50 PM ISTThe brokerage has initiated ‘accumulate’ call on the stock. on healthy launch pipeline, recovery in hospitality assets, and strong operating cashflows. It has assigned a target price of ₹537
PremiumBrokerage Geojit initiated coverage on the real estate player Brigade Enterprise on the back of a robust residential pipeline, healthy cash flows, and the revived hospitality segment.
The brokerage has initiated ‘accumulate’ call on the stock. on healthy launch pipeline, recovery in hospitality assets, and strong operating cashflows. It has assigned a target price of ₹537, almost 18 per cent upside.
In its note, Geojit said that Brigade Enterprise has clocked a pre-sale of Rs.2,618.5 cr in 9MFY23, up 31 per cent year-on-year.
“Brigade clocked a pre-sale of Rs.2,618.5 cr in 9MFY23, up 31% YoY. Area sold increased to 3.96 msf from 3.16msf in 9MFY22, and collection increased to Rs. 2,833 cr. (+34% YoY) during the same period. We expect the momentum to continue, aided by a healthy pipeline. Hospitality revenue increased 61% YoY to Rs. 101 cr for Q3FY23. EBITDA increased to ₹21.1 cr (+17.9% YoY). In Q3 FY23, Average Revenue per Room (ARR) increased by 58% YoY, while occupancy increased by 14%." said brokerage in its report
“We have a positive view on Brigade on the back of a robust residential pipeline (9msf), Healthy cash flows, and the revived hospitality segment. But a rising mortgage rate for a longer period can be a headwind. Hence, we assign Accumulate rating to the stock with a target price of Rs. 537 based on SOTP valuation," it added.
The brokerage said that the lease income is expected to reach Rs.1,100 cr. (Rs.560cr in 9MFY23) by FY25. The lease area under operation will increase from 7.18 to 10 msf over the same period. The major lease assets are located in Bengaluru and Chennai.
“Given a healthy launch pipeline, recovery in hospitality assets, and strong operating cashflows, we have a positive outlook on the stock. But the increased interest rate may tamper with the customer’s sentiment. Hence, we assign Accumulate rating to the stock with a target price of Rs. 537 based on SOTP valuation," it added.
On Tuesday, the company stock ended 2.59% down at ₹453.30 on BSE. The stock has lost 10.38% in a year and fallen 2.25% in 2023.
