Buy Brigade Enterprises; target of Rs 720: Motilal Oswal

Motilal Oswal's research report on Brigade Enterprises

Brigade Enterprise (BEL) achieved its highest-ever quarter of bookings with pre-sales of INR14.9b, up 47%/45% YoY/QoQ and was 26% above our estimate. For FY23, pre-sales jumped 36% YoY to INR41b, which was higher than its guidance of 20-25% growth. In volume terms, bookings increased 53% YoY to 2.4msf, but blended realizations were down 5% on both a YoY/QoQ basis, due to increased contribution from plotted development projects. Excluding plotted development, realizations increased 7% YoY to INR6,806/sqft in FY23. Growth in sales was driven by 3msf of launches during the quarter. In FY23, the company launched 5.5msf of projects and is planning to launch 7.5msf of residential projects in FY24. As a result of increased scale of launches, we expect the company to report a healthy growth in FY24 with bookings projected to reach INR49b, up 19% YoY.

Outlook

We reiterate our BUY rating on the stock with an unchanged TP of INR720, implying an upside potential of 34%.

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