Domestic brokerage firm Motilal Oswal has reiterated a Buy rating on Aditya Birla Real Estate Ltd. with a target price of ₹1,960, implying a 76% upside potential from the current market price of ₹1,112. According to reports from NDTV Profit, the brokerage believes the company's business development activity, which slowed over the past two years, is expected to accelerate with sizeable project additions anticipated in the coming months. This acceleration in business development activity would enable the company to achieve its ambitious targets and drive the anticipated rally.
The brokerage expects the realty giant to meet its annual BD target of ₹10,000-15,000 crore gross development value in FY27. As reported by NDTV Profit, this acceleration in business development activity would enable the company to achieve these ambitious targets. The focus on ramping up the annuity portfolio is particularly encouraging, as it is expected to provide cash flow stability post-FY30. The anticipated project wins are expected to drive significant growth in the company's development pipeline and revenue streams.
The sale of the paper division was concluded in Q2 FY27, which should help deleverage the balance sheet, free up management bandwidth, and increase the focus on real estate development. According to NDTV Profit, this strategic divestment is expected to strengthen the company's financial position and operational focus on its core real estate business. The improved financial structure will provide the company with greater flexibility to pursue growth opportunities in the real estate sector.
The brokerage values the residential business at its net asset value, with any premium assigned to NAV contingent on a sustained revival in business development. As reported by NDTV Profit, this valuation approach reflects the company's current operational performance and future growth potential in the real estate sector. The valuation methodology is based on the company's core real estate assets and future development prospects, with the premium reflecting the expected acceleration in business development activity.
