Buy Brigade Enterprises; target of Rs 240: ICICI Direct
ICICI Direct is bullish on Brigade Enterprises recommended buy rating on the stock with a target price of Rs 240 in its research report dated November 13, 2020.
November 17, 2020 / 11:25 AM IST
ICICI Direct's research report on Brigade Enterprises
Brigade Enterprises (BEL) reported a resilient operating performance with sales volumes almost back to pre-Covid levels. The company reported a sales volume of ~1 mn sq feet (msf), a decline of merely ~1% YoY. The pre-sales (sales value) were up 8.9% YoY at Rs 576 crore, as realisations were up 9.9% YoY at Rs 5833/sq feet (largely a function of project mix). Reported revenues de-grew 57.7% YoY to Rs 310.8 crore, on account of low revenues recognition in residential segment and weaker traction in hospitality and malls segment due to Covid -19 impact. Reported EBITDA margins were up 224 bps YoY to 28.1%. BEL reported loss of Rs 17.1 crore.
The residential segment has displayed a strong recovery and continued momentum is likely to aid overall cash generation. Reopening of economy is likely to boost retail and hospitality segment, albeit gradually. Nonetheless, BEL has comfortable debt-equity and sufficient liquidity from operational commercial assets (and likely operational assets). Hence, we maintain BUY on the stock with SoTP target price of Rs 240/share. Our target price upward revision is largely on account of removing the NAV discount.
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