ICICI Securities sees strong upside in this multibagger stock. Do you own?

Multibagger stock: Brigade Enterprises shares are one of the multibagger stocks in 2021 as the real estate share surged from ₹251.50 to ₹513 apiece levels in last one year, logging around 105 per cent rise in this period. With waning of Covid cases leading to unlock theme, ICICI Securities has upgraded its tag from 'add' to 'buy' in regard to Brigade Enterprises shares. The brokerage is expecting this real estate multibagger stock top go up to ₹598 apiece levels in long term.

Highlighting the rental segment business of Brigade Enterprises; ICICI Securities report said, "Q3FY22 saw BRGD achieving residential sales bookings of 1.1msf worth Rs6.8bn vs. I-Sec estimate of Rs8.0bn owing to limited new launches during the quarter owing to approval delays. The company has 2.4msf of new residential launches lined up in Q4FY22 and another 6-7msf of launches in FY23E; it is also looking to replenish its land bank through new project additions of ~15msf across Bengaluru/Chennai/Hyderabad in FY23E. We model for flattish residential sales value of ₹28.1bn in FY22E owing to fewer launches but expect sales bookings of ₹36.5bn in FY23E and Rs43.4bn in FY24E."

Expecting full fledged recovery in its hotel segment business, the brokerage said, "While the Omicron wave has impacted Jan-Feb’22 occupancies, the reopening of F&B and resumption of leisure/weddings/domestic business travel and resumption of international flights augur well for a sustained recovery for BRGD’s hotel portfolio from Q1FY23. We expect BRGD’s hotel business to clock a marginal EBITDA of ₹0.3bn in FY22E, Rs0.8bn in FY23E and ₹1.1bn in FY24E."

"With waning of Covid cases leading to reopening of offices/malls and resumption in international travel, we expect the company’s annuity and hotel business to see a significant leg up from Q1FY23. We expect BRGD’s share of rental NOI to grow at 25 per cent CAGR over FY21-24E to ₹5.7bn driven by incremental lease out of 2.4msf of vacant area across assets by Mar’23 in Bengaluru and Chennai. Further, we expect the company’s hotel business to clock a marginal EBITDA of ₹0.3bn in FY22E, Rs0.8bn in FY23E and ₹1.1bn in FY24E vs. FY20 EBITDA of ₹0.9bn. For the residential business, we model for flattish sales value of Rs28.1bn in FY22E but expect sales bookings of ₹36.5bn in FY23E and Rs43.4bn in FY24E driven by new launches," the brokerage said.

On its suggestion to positional investors in regard to this multibagger stock, ICICI Securities said, "We upgrade our rating on Brigade Enterprises (BRGD) to BUY from ADD with a revised target price of ₹598/share (earlier ₹555) as we roll forward to Mar’23E NAV."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.