Motilal Oswal Bullish On Two Real Estate Stocks, Sees Likely Growth Up To 34%

One of the prominent brokerage firms Motilal Oswal is bullish on two stocks from the real estate sector. The firm feels that the stock prices of the companies can jump by approximately 34%. The companies are Brigade Enterprises and Mahindra Lifespaces.

Both companies have a strong order pipeline which will prove to be beneficial for the companies performance in the future. Hence, Motilal Oswal has given a 'Buy' rating to the stock of both companies after factoring in their future growth prospects.

1. Buy Mahindra Lifespace Developers shares at a Target price of Rs 520 (30% upside potential)
Given the strong project pipeline, Mahindra Lifespace Developers remains on track to achieve its stated guidance of Rs 25 billion pre-sales by FY25. It might as well achieve this target a year prior. Suggested the stock-broking firm.

IC&IC segment is already at par with Rs 5b annual leasing target. Motilal Oswal believes the company's continued traction in business development will provide further growth visibility in the residential segment, which is currently not baked into the valuation and continues to remain a key catalyst for the stock.

While the operational assets in the IC&IC segment are witnessing healthy leasing traction, the brokerage pushes out the leasing commencement at new assets in Ahmedabad and Pune.

"We also model relatively lower margins for Ahmedabad and Origins Chennai due to the high cost of acquisition. Hence, we reiterate our BUY rating with a reduced SoTP-based target price of Rs 520, indicating a 30% upside potential", the firm added

Stock Movement
The latest market price of Mahindra Lifespace Developers stock closed at Rs 406.05, up by 1.83% on an intraday basis. This stock has rallied by 15.42% in the last one year, and in the last three years, it has skyrocketed by 577.77%.

2. Buy Brigade Enterprises Ltd shares at a Target price of Rs 520 (upside potential 34%)
With a better-than-expected pre-sales performance and a healthy launch pipeline for 4QFY23, Motilal Oswal has revised and raised its estimates for FY24E and FY25E pre-sales by 17% and 16% to Rs 49 billion and Rs 57 billion respectively.

Based on the company's order book, it is seen that the company scales up its launch pipeline to 7.5 msf in FY24 from 5.5 msf in FY23, and it will continue to deliver healthy growth on pre-sales, as per the research report. The company added Rs 50 billion of new land in FY24 and we expect the traction on land acquisition to continue.

At Rs 44 billion of implied value for its residential segment, the stock broking firm believes not much growth in BD is built into the valuation. "We reiterate our BUY rating on the stock with an unchanged target price of Rs 720, implying an upside potential of 34%.", it further added.

Stock Movement
The latest market price of Brigade Enterprises stock closed at Rs 542.85, marginally up by 0.99% over the previous day's closing. This stock has rallied by 21.96% in the last one year, and in the last three years, it has skyrocketed by 454.49%.

Disclaimer
The stock has been picked up from the brokerage report of Motilal Oswal. Greynium Information Technologies, the author, or the brokerage firm will not be liable for any losses caused as a result of decisions based on the write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.