Stock turns ex-bonus following 1:3 bonus issue
About the stock: Brigade Enterprises (BEL) is one of the leading property developers in South India. Its offerings include Grade-A commercial property, affordable to ultra-premium housing in real estate business and operational marquee hotel assets in hospitality segment (listed entity). Given the healthy end user demand, strong launches, it has reported a robust sales value CAGR of ~22% over FY21-26 to ₹ 7,424 crore
Key Development: The company’s 1:3 bonus issue has come into effect, with the stock turning ex-bonus on June 17, 2026. Under the issue, shareholders will receive one bonus equity share for every three equity shares held.
Investment Rationale
• Eyeing 20% YoY pre-sales growth in FY27: The company is eyeing ₹ 9000 crore pre-sales in FY27 (+21% YoY) led by a strong launch pipeline of ₹ 11,900 crore for FY27 (₹ 10,000 crore GDV projects launched in FY26). Of the 11.5 msf launch pipeline for FY27, 4.5 msf is expected to be launched in Bengaluru while 3 msf each in Chennai and Hyderabad. Project approval related delays, which had impacted FY26 pre-sales (-5% YoY) and collections (flattish YoY) is said to be largely behind it. Overall, out of its ongoing residential portfolio of ~₹ 28,000 crore, it has unsold inventory of ~₹ 10,000 crore which would be sold over the next three years. On the demand front, it continues to see 10-12% footfall conversions and NRI buyers stable at ~10%.
• Leasing rentals targeted to grow to ~₹ 2000+ crore in 6 years from ~₹ 1300 crore in FY26: In its leasing portfolio, it had launched ~1.3 msf in FY26, 3 msf ongoing projects and has 4.5/5.5 msf upcoming launches in FY27/FY28. Ongoing projects along with 4.5 msf additions in FY27 is expected to generate incremental rentals of ₹ 800 crore post completion/ leasing of assets. Overall, its rental income is targeted to reach ~₹ 1600 crore/ ~₹ 2000+ crore over the next 3 years/ 6 years from ₹ 1303 crore in FY26. It would be incurring ₹ 6000 crore capex over the next 4 years towards scaling up it leasing portfolio. In hospitality, it plans to add 1700 keys (doubling its portfolio of hotels to 18 hotels) over the next 4-5 years.
Rating and Target Price
• BEL’s residential segment is expected to revert to growth trajectory from FY27 while commercial and hospitality are expected to maintain healthy growth trajectory aided by its scale up plans.
• Factoring stock bonus, we revise our SOTP based target price to ₹ 780, and continue to maintain Buy rating on the stock.
