CRISIL Research has assigned a CRISIL IER fundamental grade of 4/5 to Brigade Enterprises. The grade indicates that the company's fundamentals are 'superior' relative to other listed equity securities in India. Our fair value of the stock is Rs 210 a share. "At the current market price of Rs 131 a share, our valuation grade is 5/5 indicating that the market price has strong upside from the current levels."

CRISIL Research expects revenues to grow at a two-year CAGR of 43% to Rs 19 billion by FY16 driven by incremental revenue recognition in ongoing projects and steady growth in leased assets and hospitality projects. Of the 9.4 mn sq ft projects launched, 51% (totalling Rs 20.6 billion) are booked until June 2014 while revenue recognised is Rs 6.8 million. The remaining revenues will be booked as the construction on these projects progresses. EBITDA margin is expected to improve from 33.8% in FY14 to 34.2% in FY16 primarily driven by revenue growth. PAT is expected to increase to ₹2.8 bn in FY16 from Rs 0.8 billion in FY14.

CRISIL Research has used the sum-of-the-parts method to arrive at a fair value of Rs 210 a share for Brigade. The residential and commercial projects on an outright sale basis are valued by the net asset value method; the hospitality projects by the EV/room method; and leased commercial and retail projects are valued using capitalisation rates. The fair value implies P/Bv multiples of 1.7x FY15E and 1.4x FY16E book value.

The grades are not a recommendation to buy, sell or hold the graded instrument, or a comment on the graded instrument's future market price or its suitability for a particular investor.

Shares of the company gained Rs 1.6, or 1.22%, to settle at Rs 132.75. The total volume of shares traded was 28,331 at the BSE (Monday).