Stock Market Tip: Brigade Enterprises shares to rise 40 pct in 12 months, say experts

Brigade Enterprises that posted Rs 72 crore profit in the fourth quarter of the FY 19 against Rs 15.46 crore in the same period last fiscal is expected to give around 40 per cent return in long-term. The stock market experts are of the opinion that even after a heavy selloff in recent one week at the Dalal Street, the counter is maintaining Rs 235 DMA, which indicates about the strong and bullishness into the counter. As per the expert opinion, the Brigade Enterprises share price can show Rs 320-325 per stock levels in 12 months.

Speaking about the fundamentals of the Brigade Enterprises stock Aarti Rao, Analyst at Elara Securities said, "Brigade Enterprises consolidated revenue grew by 75.3% YoY to Rs 7.6bn on the back of projects, which were completed during the quarter. Operationally, it was another strong quarter with pre-sales up 122% YoY and 17% QoQ to Rs 5.2bn, aided by a strong response for its Utopia (Bangalore) project, which was launched in Q3-Q4FY19. Collections were up 31.2% YoY to Rs 6.2bn." 

Rao added that leasing and hospitality income was up 11.3% YoY at Rs 805mn and up 16.5% YoY at Rs909mn in Q4FY19. Brigade Enterprises' EBITDA was up 59.8% YoY at Rs 2.2bn and margin at 28.3% in Q4FY19. Other income was higher at Rs 178mn along with higher tax spend at 37.4%. As a result, PAT was up 121% YoY at Rs 597mn. Net debt rose by Rs 1.2bn QoQ at Rs 29.5bn. Adjusted for the SPV stake, net debt stood at Rs 24.7bn. Brigade Enterprises has a growing annuity income portfolio, which is likely to post a 30% CAGR over FY19-21E.

"The counter is showing an upside potential for near 40 per cent and can show around Rs 320 per stock levels in one year," Rao suggested investors. Currently, the counter is oscillating around Rs 225 to 235 per stock levels.

Talking about the technicals of the Brigade Enterprises stock Prakash Pandey, Head of Research at Fairwealth Securities said, "Technically, the Brigade Enterprises stock is quite strong and the DMA chart shows it has maintained above Rs 200, which is quite promising, especially if you go by the recent heavy selloff in the last seven trading sessions." Pandey said that the Cup and Handle chart also shows that most of the correction in the stock has already taken place and now it will show an upward trend once the market gets on track."

"In short-term or for the three-month perspective, one can buy this stock for the target of Rs 265-280 while in long-term the market investor can hold this stock for the target of Rs 325-330 per stock levels," Pandey suggested.