India’s real estate industry is a key economic driver, contributing around 6-7% to GDP. Expected to reach $1 trillion by 2030, the sector is bolstered by urbanization and housing demand. In FY23, it attracted $5.5 billion in investments, with residential and commercial projects leading the growth.
Brigade Enterprises Ltd has a market capitalization of Rs 26,320.59 crore, the shares were trading at Rs 1,132.60 per share, decreasing around 0.54 percent as compared to the previous closing price of Rs 1138.75 apiece.
Examining the company’s financial performance, revenue magnified a significant 65 percent from Rs 654 crore in Q1FY24 to Rs 1,078 crore in Q1FY25, during the same time frame net profit zoomed 268 percent from Rs 22 crore to Rs 81 crore.
Edelweiss, one of the well-known brokerages in India, gave a ‘Buy’ call on the real estate stock with a target price of Rs 1,541, indicating a potential upside of 36 percent from Monday’s price of Rs 1,132.60 per share.
Here are the rationale for a potential upside of 36%:-
● Pre-sales grew 9% YoY to ₹1,086 crore in Q1FY25, driven by a 39% rise in average realization to ₹9,483/sq. ft. despite a 21% dip in volume due to launch delays. The company plans to launch 12.6 million sq. ft. in FY25, with 30% pre-sales growth expected.
● In Q1FY25, the hospitality segment’s revenue grew 12% YoY to ₹118 crore, driven by higher occupancy at 75%. Despite a 519bp EBIT margin decline, the company plans to expand its inventory by 1,000 keys, anticipating robust growth from strong domestic demand and foreign tourist revival.
● Leasing Segment Growth: In FY24, SEZ assets experienced a surge in leasing activity, with occupancy reaching 97%. This led to a 23% revenue and 43% EBIT growth YoY in Q1FY25, driven by higher occupancy and robust demand in retail spaces.
● Future Expansion: The company plans to develop a 10 million sq. ft. land bank for future commercial assets and added two new projects in Kochi and Bengaluru, with an annual rental potential of ₹122 crore. Four annuity assets (2.35 million sq. ft.) are currently under development.
Brigade Enterprises Limited provides real estate development, leasing, hospitality, and associated services. The company’s segments include Real Estate, Lease Rentals, and
Hospitality. The Real Estate section develops residential, commercial, and mixed-use projects.
Written by:- Abhishek Singh
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