B Brigade Enterprises stock soars 1,136% to Rs 507.35, with 42% upside

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B Brigade Enterprises stock soars 1,136% to Rs 507.35, with 42% upside

The scrip has soared a whopping 1,136 per cent in the last 10 years to Rs 507.35 apiece, against the 41.03 level, a decade ago, as the shares of Bengaluru-based realtor Brigade EnterprisesBrigade Enterprises have delivered a multibagger return to its long-term investors.

The scrip's price is 13 per cent less than its recent high, which hit a 52 week low of Rs 385.25 on May 12 and a 52 week high of Rs 585 on September 15.

The stock is bullish and there is up to 42 per cent upside potential for this multibagger, according to select brokerages.

Motilal Oswal believes that there will be a further scale-up in the residential business as Brigade management monetises its 35 million square feet msf land bank over the next five to six years.

Over the last four years, Brigade has scaled up all aspects of its business through a revamped Residential strategy and aggressive capex in its Commercial business, which is now bearing fruit, it said.

Motilal Oswal believes that rental income for Brigade Enterprises will increase by 15 per cent CAGR over FY 22 -- 24 to Rs 750 crore on the back of a recovery in leasing. This brokerage house has resumed coverage on the stock with a 'Buy' rating and a target price of Rs 720, resulting in a potential upside of 42 per cent.

The shares of Brigade Enterprises command a market value of more than 11,000 crore and are trading above their 100 day and 200 day moving averages. The scrip is trading below its short-term 20 day and 50 day moving averages.

ICICI Securities retained its 'Buy' rating on the stock with a target price of Rs 595 per share.

The brokerage said that FY 22 was a challenging year for Brigade Enterprises, with Covid impacting the leasing and hospitality segments in the first half of the financial year.

The company clocked a resilient performance with residential sales of 4.7 msf estimated at Rs 320 crore up 9 per cent YoY in value terms, while the company also reduced its share of net debt by Rs 900 crore YoY to Rs 1,750 crore in March 31, aided by a QIP fund raise of Rs 500 crore in the March quarter of FY 22.

An aggressive residential launch pipeline, strong brand perception in the primary market and a robust portfolio of operational retail, commercial and hotel assets are expected to fuel the growth story, the brokerage said in a note.

We expect a nearly 95 per cent occupancy and a hike in rental rates across the company's annuity portfolio in the next 3 -- 4 years due to significant improvement in the fundamentals of the commercial and retail segments. The hotel sector is expected to advance significantly, due to the opening up of the economy and the resumption of corporate events and travel. Edelweiss believes that the rapid recovery in the hotel sector and improving occupancy and room rates will support earnings growth.

The brokerage has opened a coverage on the realty stock with a target price of 633 based on 1 time FY 24 E NAV. The company had a consolidated net profit of Rs 87.68 crore for the June quarter.

In the year-ago quarter last year, it posted a net loss of Rs 40.09 crore. In the June quarter, the total income jumped more than twofold to Rs 920.28 crore compared to Rs 391.52 crore in the same quarter last year.

In the first quarter of this fiscal, Brigade Group sales bookings increased by 70 per cent to Rs 813.9 crore. The sales bookings of the Bengaluru-based developer stood at Rs 480 crore in the year-ago period.