Knowledge Realty gets new 'Add' from JM Financial; limited upside seen

JM Financial has set a target price of ₹130 per share for Knowledge Realty, implying a potential total return of 7.5 per cent

JM Financial has initiated coverage on Knowledge Realty Trust Ltd. with an 'Add' rating, noting limited upside at current valuations despite strong operating fundamentals and favourable sector tailwinds.

 

The brokerage has set a target price of ₹130, implying potential total returns of 7.5 per cent. 

 

In its initiation note, JM Financial said Knowledge Realty Trust, co-sponsored by Blackstone and the Sattva Group, is the largest Real Estate Investment Trust in India by Net Operating Income and Gross Asset Value. The REIT has a total leasable area of 46.3 million square feet, of which 37.1 million square feet is operational, with a strong presence across Hyderabad, Bengaluru and Mumbai. 

 

The brokerage expects the company's net operating income to grow at a healthy 14 per cent compound annual growth rate (CAGR) between financial year 2025 (FY25) and FY28 to ₹5,100 crore, driven by higher rent-yielding occupancy, mark-to-market gains, particularly in Mumbai, and area additions of 1.2 million square feet. FY26 is expected to be the strongest year, with 24 per cent year-on-year (Y-o-Y) growth, aided by improving occupancy, it said.

 

As of the end of FY25, committed occupancy stood at 91.4 per cent, up 5 percentage points year on year, and improved further to 92 per cent as of September 2025. JM Financial expects rent-generating occupancy to converge with committed occupancy over the next two quarters.

 

The brokerage highlighted that KRT stands to benefit from structural tailwinds in India’s commercial real estate market. Its core markets -- Hyderabad, Bengaluru and the Mumbai Metropolitan Region -- have accounted for around 60 per cent of total gross office leasing since calendar year 2021, according to Cushman & Wakefield. 

 

India’s office market recorded gross leasing of nearly 80 million square feet in calendar year 2024, about 19 per cent higher than pre-pandemic levels, with momentum continuing into calendar year 2025, where around 60 million square feet has already been absorbed in the first nine months.

 

JM Financial also pointed to KRT’s strong balance sheet, with a loan-to-value ratio of 18 per cent, which provides headroom for inorganic growth in the near term. However, at the current market price, the REIT is trading at a 7 per cent premium to its September 2025 net asset value, limiting upside potential. 

Knowledge Realty share price movement

Knowledge Realty's stock fell as much as 0.36 per cent during the day to ₹124.5 per share. The stock pared losses to trade 0.22 per cent lower at ₹124.7 apiece, compared to a 0.46 per cent advance in Nifty 50 as of 10:13 AM. 

 

The counter has risen 20 per cent since listing, compared to a 9.7 per cent advance in the benchmark Nifty 50 so far this year. Knowledge Realty has a total market capitalisation of ₹55,305.83 crore.   ==========

 

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