3 Midcap Real Estate Stocks To Buy With Potential Returns Of Up to 40%

Motilal Oswal is bullish on the stock of Prestige Estate, Brigade Enterprises, and Sobha. The brokerage firm is recommending to buy the stocks for a potential upside of up to 40%.

Here is a overall analysis of the latest reports of Motilal Oswal on the 3 real estate stocks.

Buy Call of Motilal Oswal

Stock	Current Market Price (Rs.)	Target Price
Prestige Estate Projects Limited	479	675
Sobha Limited	710	850
Brigade Enterprises Limited	570	720

Prestige Estate Projects Limited

Prestige Estate is a real estate company, one of the largest property development companies based in south India.
According to the reports of Motilal Oswal, "PEPL delivered 90% YoY growth in pre-sales in FY22 to over INR100b and is targeting INR120b worth of bookings in FY23. Based on its 60msf of the future project pipeline, including the launches in Mumbai and NCR, we expect pre-sales to at least sustain the INR100-120b run rate over the next three-to-four years".
We initiate coverage on the stock with a Buy rating and a SoTP-based TP of INR675, implying a potential upside of 40%, according to Motilal Oswal's latest report.

Sobha Limited

Sobha Limited is one of the leading real estate development companies in India. The company is engaged in constructing commercial premises, housing projects, townships, and other activities related to this field.

"SOBHA has one of the largest land reserves (~210msf) in the listed Real Estate space. Citing the upcycle opportunity, the management's focus is on evaluating its land parcels to make it marketable and saleable in the near term." Further on, "We initiate coverage on the stock with a Buy rating and a TP of INR850, implying a potential upside of 20%." says Motilal Oswal's report.

Brigade Enterprises Limited

Brigade Enterprises is one of the top real estate development companies in south India. The company has completed over 250 buildings which are aggregating to over 70mn. Square feet of developed space in offices, residential, retail, and hospitality sectors across different cities in south India.

According to the latest report of Motilal Oswal, "Over the last four years, BRGD has scaled up all facets of its business through (a) a revamped Residential strategy and (b) aggressive Capex in its Commercial business, which is now bearing fruit. We expect a further scale-up in the Residential business as the management monetizes its 35msf land bank over the next five-to-six years. We expect BRGD's rental income to register a 15% CAGR over FY22-24 to INR7.5b on the back of a recovery in leasing. We have resumed coverage on the stock with a Buy rating and TP of INR720, implying a potential upside of 27%."