Buy Brigade Enterprises; target of Rs 720: Motilal Oswal

Motilal Oswal is bullish on Brigade Enterprises recommended buy rating on the stock with a target price of Rs 720 in its research report dated July 20, 2023.

Broker Research

July 22, 2023 / 12:45 IST

Buy

26 Aug, 2025 12:21

Volume

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Motilal Oswal's research report on Brigade Enterprises

In FY23, BEL delivered 34% YoY growth in sales volumes to 6.3msf, while the booking value grew 36% YoY to INR41b. The significant growth can be attributed to an uptick in project launches, as the company launched 5.5msf of projects vs. 3.8msf in FY22. In FY24, the company expects to launch 7.5msf of projects. The company has strong visibility for 4.5-5.0msf of these launches. Out of the total 7.5msf, 5- 6msf is expected to be in Bengaluru. The estimated GDV for these projects in Bengaluru is expected to be INR35-40b. The company also plans to launch its luxury project at TVS land in Chennai. It is expected to consist of 0.6msf of residential development, 0.3msf office, and the remaining in high street retail with a residential GDV of INR12b. BEL has set an aggressive target to launch the Chennai project in 4QFY24, i.e., within one year of acquisition. Apart from this project, the company’s launches are likely to be similar to those in FY23. Therefore, the successful launch of this project is likely to be a key driver of growth in FY24.

Outlook

We believe that an increase in business development activities, especially in Hyderabad, will contribute to additional growth visibility for BEL. This, in turn, could result in a re-rating of the valuation for its residential segment. We value the residential segment at INR87b based on DCF-methodology. We reiterate our BUY rating with an unchanged SOTP-based TP of INR720, implying a 24% upside potential.

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