Launches turn the corner

The near-term story is a supply rebound. FY26 sales bookings slipped 5 percent to Rs 7,400 crore on delayed approvals, and the first quarter of FY27 was again subdued at about Rs 1,060 crore with no major residential launches. That has now changed: the September launch of Brigade Barcelona in Neopolis, Hyderabad — carrying gross development value of Rs 2,700 crore — has kick-started the calendar.

Management is sticking with guidance of about Rs 9,000 crore of FY27 sales bookings, implying 20 percent growth, underpinned by launches worth roughly Rs 10,000 crore of GDV — some 94 lakh sq ft of residential projects across Bengaluru, Chennai and Hyderabad, with the balance due in the second half. A cushion of about Rs 9,000 crore of unsold inventory in ongoing projects adds support. ICICI models even higher bookings of Rs 9,200 crore in FY27E and Rs 11,300 crore in FY28E.

Doubling the annuity and hotel engine

Beyond selling homes, Brigade is building recurring income. Over FY26-31 it plans to roughly double its hotel and annuity portfolio: nine new hotels adding 1,700 keys across South India at an estimated capital outlay of about Rs 3,600 crore, and roughly 1 crore sq ft of new annuity assets to lift leasing income, entailing a further Rs 6,000 crore of capital spending.

The funding model is prudent: the residential business is largely self-funded, while incremental debt and annuity cash flows are earmarked for the leasing build-out. Rental income is modelled to edge up to about Rs 1,378 crore by FY28E and hospitality income to Rs 757 crore, from Rs 1,259 crore and Rs 525 crore respectively in FY26.

Volumes and pricing, at a portfolio level

The mix is healthy: area sold recovers to about 87.8 lakh sq ft by FY28E while average realisation edges up to Rs 12,876 a square foot, so bookings growth rides both volume and price rather than price alone.

The numbers behind the call

Reported earnings dipped in FY26 as approvals slipped, but ICICI expects a sharp rebound as launched inventory converts to revenue, with margins widening past 30 percent.

Net profit is modelled to more than double from Rs 644 crore in FY26 to Rs 1,480 crore by FY28E, dragging the price-earnings multiple down from about 31 times to under 14 times — a striking de-rating for a company whose bookings are re-accelerating.

How ICICI builds the Rs 885 target

The target is a sum of the parts, per share: the residential business on discounted cash flow, rental assets capitalised at an 8 percent yield, and hotels at 16 times forward operating profit — netted for debt to a net-asset value of Rs 680, then marked up 30 percent for growth.

The three operating businesses sum to an enterprise value of Rs 732 a share; stripping out net debt of Rs 52 leaves a net-asset value of Rs 680, to which ICICI applies a 30 percent growth premium — Rs 205 a share — to reach the Rs 885 target.

The target for investors

ICICI Securities maintains a BUY with an unchanged sum-of-the-parts target of Rs 885, one of the widest upsides in its property coverage at roughly 44 percent. The setup pairs a clear near-term catalyst — the launch calendar finally opening up — with a diversified, partly annuity-backed model trading at a meaningful discount to the analysts' assessed value. For investors, the frame is to accumulate into the bookings recovery; the shares sit well below their 52-week high of Rs 802, and the pace and success of new launches is the swing factor to track.

Key risks