Brigade Enterprises ends FY23 on strong note; outlook robust

For FY23, Brigade saw pre-sales surge 36%, exceeding its guidance of 20-25% growth. (Company website)
For FY23, Brigade saw pre-sales surge 36%, exceeding its guidance of 20-25% growth. (Company website)

Summary

  • Motilal Oswal expects Brigade Enterprises to report a healthy growth in FY24 with bookings projected to reach R s4900 crore, up 19% year-on-year

Residential real estate developer Brigade Enterprises Ltd reported stellar pre-sales in the March quarter (Q4FY23) with record-high bookings of 1,490 crore that rose 47% year-on-year, beating analysts' estimates. 

For FY23, the company saw pre-sales surge 36%, exceeding its guidance of 20-25% growth. The outlook for FY24 also looks encouraging.

The developer attributes this strong performance to a rise in hou demand and plans to capitalise on this by launching 7.5 million square feet of residential projects. These projects have a potential revenue of 6,000 crore and are expected to commence in the second half of FY24, the management said.

"As a result of increased scale of launches, we expect the company to report a healthy growth in FY24 with bookings projected to reach Rs4900 crore, up 19% year-on-year," said analysts at Motilal Oswal Financial Services Ltd in a report.

With better-than-expected pre-sales performance and a healthy launch pipeline for Q4FY23, the domestic brokerage has raised its FY24E/FY25E pre-sales by 17%/16% to 4,900 crore/Rs5700 crore.

The company added Rs5,000 crore worth of new land in FY23 and analysts expect the traction on land acquisition to continue.

Another comforting factor for investors is that the company's residential segment debt reduced sequentially in Q4FY23 and with this, at the standalone level, the company has zero debt in the residential segment. Cash collections rose 10% year-on-year in Q4FY23, aided by soild traction in residential business and steady rentals in its annuity portfolio.

In the last year, the stock has rallied 23%, slightly ahead of the Nifty Realty Index. "BEL should continue to perform well aided by a robust launch pipeline and improving cash flow trajectory. Cash flow would determine the stock’s trajectory in our view," said Nuvama Research in a report.

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