Brigade Enterprises shares jump 8% on Kotak Equities’ upgrade

“Brigade currently trades at 6X adjusted EV/EBITDA on FY2026E earnings. We do concede the risk of a temporary ban on construction activity in Bengaluru, though we believe that the onset of monsoon will likely address the situation, while government projects would help structurally solve the water crisis in Bengaluru," Kotak note said.

Brigade has had strong showing across business segments. It has seen a 44% year-on-year growth in 9MFY24 pre-sales for the development business with prospective launches of 10.8 million square feet in the residential space over the next 12 months.

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Moreover, it saw a 24% YoY growth in EBITDA for 9MFY24 in the rental business with occupancy of 93% as of December 2023 and another 1.4 million square feet of under-construction office space.

It has also seen a 56% YoY growth in the hospitality segment with one more hotel (130 keys) under construction.

The realty stock has delivered multibagger returns of 107% in the past 12 months which is lower than the index returns of 121% by Nifty Realty during this period. However, it has outperformed the broader Nifty which has given returns of 29% over a 1-year period.

It has corrected from its 52-week high of Rs 1,108 it hit in February. It is now trading below its 50-day simple moving average (SMA) while maintaining its 200-day SMA.

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