Brigade Enterprises - Building A War Chest For Growth: ICICI Securities
Robust launch pipeline and land bank additions to spur growth.
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ICICI Securities Report
Brigade Enterprises Ltd. has been beefing up its land reserves so far in year-o-date-FY24 with three large land acquisitions (one each in Hyderabad, Chennai and Bengaluru) having a cumulative estimated gross domestic value of Rs 53 billion.
With a residential launch pipeline of ~8 million square feet of over the 12 months, we model for residential sales bookings of Rs 45.8 billion in FY24E and Rs 51.3 billion in FY25E.
Further, we expect the company 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 project becoming fully operational in FY25E.
We estimate Brigade Enterprises 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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