ICICI Direct is bullish on Brigade Enterprises has recommended buy rating on the stock with a target price of Rs 330 in its research report dated May 09, 2019.
ICICI Direct's research report on Brigade Enterprises
Brigade Enterprises’ (BEL) sales volumes grew 2.2x YoY to 0.96 msf in Q4FY19. The company clocked pre-sales worth 2.2x YoY to Rs 519.8 crore (16.6% QoQ growth) achieving collections worth Rs 618.5 crore (31.2% YoY growth) in Q4FY19. On the leasing front, BEL leased 1.2 msf of new office space in FY19, estimated to yield rentals worth Rs 90.0 crore. Of this, it leased ~0.6 msf in Brigade Tech Gardens & WTC Chennai, which are yet to be operational. On the financial front, revenues grew 75.3% YoY to Rs 760.0 crore in Q4FY19 (our estimate: Rs 692.3 crore). EBITDA margins contracted 280 bps YoY to 28.3% in Q4FY19 but were better than our estimate of 26.6%. Overall, PAT grew 3.3x YoY to Rs 59.3 crore in Q4FY19 on account of higher topline growth and better-than-expected EBITDA margins.
Considering a sharp ramp up in its leasing portfolio and in sales momentum in the residential business, we believe BEL’s current valuation is attractive (1.3x FY20E P/BV). Hence, we maintain our BUY recommendation on the stock with an SoTP-based target price of Rs 330/share.
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