ICICI Securities has maintained its “BUY” recommendation on Brigade Enterprises with a revised target price of Rs 1,179, implying a potential upside of nearly 53% from the current market price of Rs 773. The brokerage believes Brigade Enterprises is entering a stronger growth phase driven by a large residential launch pipeline, improving booking momentum, and aggressive expansion in annuity and hospitality assets. Despite a softer FY26 performance caused by approval delays in Chennai, the company’s management remains confident about FY27 growth, targeting sales bookings of nearly Rs 90 billion. ICICI Securities expects residential demand, rental income growth, and hotel expansion to significantly strengthen earnings visibility over the next two financial years.

ICICI Securities Reaffirms BUY Call on Brigade Enterprises

Brigade Enterprises remains one of the preferred real estate bets in South India as ICICI Securities reiterated its positive outlook on the stock following the company’s FY26 earnings update. The brokerage revised its target price upward to Rs 1,179 from Rs 1,074 after incorporating balance-sheet adjustments and continued optimism surrounding Brigade’s long-term expansion strategy.

The brokerage highlighted that Brigade’s diversified exposure across residential housing, office leasing, retail assets, and hospitality gives it multiple earnings drivers at a time when premium real estate demand continues to stay resilient in key urban markets such as Bengaluru, Chennai, and Hyderabad.

Delayed Approvals Weighed on FY26 Sales Bookings

FY26 sales bookings declined 5% year-on-year to Rs 74 billion, primarily because several launches were delayed due to regulatory approvals, especially in Chennai. However, the company delivered a relatively stable operational performance in the fourth quarter, with Q4FY26 sales bookings rising 3% year-on-year to Rs 25.2 billion after launching nearly 4 million square feet of projects during the quarter.

Management indicated that approval-related bottlenecks have now largely eased, paving the way for a significantly stronger FY27 launch calendar. Brigade plans to launch residential projects spanning nearly 11.6 million square feet with an estimated gross development value (GDV) of around Rs 120 billion across its core southern markets.

ICICI Securities projects Brigade’s sales bookings to rise to approximately Rs 96 billion in FY27 and further to Rs 113 billion in FY28, supported by a robust project pipeline and steady demand trends.

Residential Business Continues to Anchor Growth

Residential real estate remains Brigade’s primary earnings engine, even as the company expands into annuity-driven businesses. According to the report, Brigade sold nearly 6.13 million square feet during FY26 compared with 7.05 million square feet in FY25. Despite lower volumes, realizations improved meaningfully to Rs 12,106 per square foot from Rs 11,138 per square foot in the previous year.

The improving pricing environment demonstrates Brigade’s ability to maintain premium positioning in high-demand urban markets. The brokerage expects realizations to continue improving steadily, reaching nearly Rs 12,876 per square foot by FY28.

Massive Hospitality and Annuity Expansion Plans Unveiled

One of the most important strategic developments highlighted in the report is Brigade’s aggressive annuity and hotel expansion roadmap. The company plans to nearly double its hotel and annuity portfolio between FY25 and FY30.

Its hospitality subsidiary intends to develop nine new hotels with nearly 1,700 additional room keys across South India. The estimated capital expenditure for this expansion stands at roughly Rs 36 billion over the next five years.

In parallel, Brigade also plans to construct nearly 10 million square feet of annuity assets aimed at boosting recurring leasing income. This development pipeline may require an incremental investment of approximately Rs 60 billion over FY26-FY30.

The brokerage believes this strategic shift toward recurring income streams could significantly improve Brigade’s earnings stability and valuation profile over time.

Office Leasing Recovery Could Aid Rental Momentum

Leasing momentum remains another important monitorable for investors. Brigade currently has a sizable office and retail portfolio under operation. According to the report, approximately 8.26 million square feet of operational office assets are already leased out, while around 1.10 million square feet remains available for leasing.

Importantly, management expects the vacant 0.37 million square feet space at the World Trade Centre office asset in Bengaluru — vacated earlier by Amazon — to be leased within the next six months.

Rental income is projected to steadily climb from Rs 12.59 billion in FY26 to Rs 13.78 billion by FY28, reflecting stable annuity growth.

Q4FY26 Earnings Reflect Margin Pressures

Quarterly profitability remained under pressure despite stable revenues. Brigade reported Q4FY26 consolidated operating income of Rs 14.57 billion, largely flat year-on-year. EBITDA, however, declined 12.3% to Rs 3.64 billion, while EBITDA margin contracted to 25% from 28.5% in the year-ago period.

Reported profit after tax for the quarter dropped sharply by 41.1% year-on-year to Rs 1.45 billion due to lower operating profitability and higher minority interest adjustments.

Still, ICICI Securities believes these short-term pressures do not materially alter Brigade’s medium-term growth trajectory.

Strong Earnings Growth Expected Through FY28

The brokerage expects Brigade’s financial profile to strengthen materially over the next two years. Net revenue is projected to rise from Rs 56.97 billion in FY26 to nearly Rs 88.95 billion by FY28. EBITDA could climb from Rs 14.27 billion to Rs 27.06 billion during the same period.

Net profit is forecast to increase sharply to Rs 14.8 billion in FY28 compared with Rs 6.44 billion in FY26, while earnings per share may rise to Rs 60.5 from Rs 26.4.

Valuation Leaves Room for Significant Upside

ICICI Securities values Brigade Enterprises using a sum-of-the-parts methodology. The brokerage assigned value to Brigade’s residential development business, rental assets, and hotel operations separately.

The residential business contributes Rs 467 per share to the valuation, rental assets contribute Rs 373 per share, while hotels account for another Rs 135 per share. After adjusting for net debt and assigning a 30% premium to net asset value, the brokerage arrived at the revised target price of Rs 1,179.

At current levels, the brokerage believes Brigade remains attractively valued considering its launch visibility, expanding annuity portfolio, and improving earnings outlook.

Key Risks Investors Should Monitor

Despite the optimistic outlook, the brokerage flagged certain risks that could impact performance. A slowdown in residential demand, delays in project launches, weaker office leasing activity, or elevated borrowing costs could affect earnings momentum and valuation expansion.

However, with approvals now improving and Brigade entering an aggressive launch cycle, ICICI Securities believes the company is well-positioned to deliver stronger operational growth over FY27 and FY28.