Brigade Enterprises - On A Strong Footing: ICICI Securities

ICICI Securities Report

We expect Brigade Enterprises Ltd. to see continued traction across business segments in FY24-25E. With a residential launch pipeline of ~8 million square feet over the 12 months along with the recently acquired ~10acre land parcel in Kokapet, Hyderabad, we model for residential sales bookings of Rs 45.8 billion in FY24E and Rs 51.3 billion in FY25E.

Further, we expect Brigade Enterprises to clock rental net operating income compound annual growth rate of 16% over FY22-25E to Rs 6.2 billion led by lease-up of vacant space in Tech Gardens, Bengaluru and Brigade Twin Towers office project becoming fully operational in FY25E.

With the Indian hotel industry seeing buoyant demand, we estimate the company to clock hotel Ebitda of Rs 1.4 billion in FY24E and Rs 1.6 billion in FY25E with the hotel portfolio capable of clocking Rs 1.8 billion of stabilised annual Ebitda beyond FY25E.

We retain our 'Buy' rating with an unchanged target price of Rs 695/share based on one time FY24E net asset value.

Key risks are weakness in office leasing and slowdown in residential demand.

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