Aditya Birla Real Estate Gets 'Buy' As Nomura Initiates Coverage, Sees 30% Upside

Nomura Global Markets Research initiated a 'buy' coverage on Aditya Birla Real Estate Ltd., with an upside of nearly 30%. The company could be among the top real estate firms with long-term visibility, business development and strong brand equity, the brokerage said.

It has a target price of Rs 3,700 per share, against the previous close of Rs Rs 2,857.8 apiece on the BSE. This implies an upside of 29%.

Nomura sees long-term visibility with the development of a 40-acre prime Worli land parcel. It expects cumulative pre-sales of Rs 40,000 crore at over 40% Ebitda margin over its lifetime in Worli.

Large scale, disciplined and quality business provides visibility on future pre-sales and margins, it said in a note on Oct. 15. The company also enjoys strong brand equity, it said.

Nomura sees a cumulative project pipeline gross development value of Rs 90,000 crore, with 87% pre-sales growth in fiscal 2025. The company has the ingredients to be among top real estate players in India, the brokerage said.

Given the strong demand for its projects, it should be able to exceed Rs 7,500 crore in pre-sales in fiscal 2025, Nomura said.

Aditya Birla Real Estate's share price rose as much as 3.2% during the day before paring gains to trade 1.71% higher at Rs 2,907 apiece, compared to a 0.09% decline in the benchmark Nifty 50 as of 10:34 a.m.

The stock has risen 144% during the last 12 months and has advanced by 136% on a year-to-date basis. The relative strength index was at 62.

All four analysts tracking the company have a 'buy' rating on the stock, according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 13.7%.