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Buy Brigade Enterprises, target Rs 299: HDFC Securities

HDFC Securities has a buy call on Brigade Enterprises with a target price of Rs 299.

The current market price of Brigade Enterprises is Rs 195.20.

Time period given by the brokerage is one year when Brigade Enterprises price can reach the defined target.

The view of the brokerage on the company:
Adoption of Ind AS 115 had a negative impact on reserves of Rs 4.1bn. Revenue for 1QFY19 came in at Rs 7.0bn. Due to Ind AS 115, revenue was higher by Rs 1.2bn.

EBIDTA margins increased 293bps YoY to 25.7 per cent. Interest cost increased 3.4 per cent YoY to Rs 628mn. APAT came in at Rs 631mn.

During 1QFY19, 2 real estate projects of 0.7mn sqft (BEL – 0.6mn sqft share) were launched.

1QFY19 Real Estate pre-sales came in at 0.43mn sqft; Rs 2.2bn (+37 per cent YoY).

Realisation was Rs 5,122/sqft. BEL held an annual showcase in Jul-18, which saw 9 new launches and has driven sales of nearly 0.6mn sqft (office+ resi) in 2QFY19 so far. BEL has future plans of 13mnsqft of launches (Resi – 8mn sqft and Commercial – 5mn sqft) in addition to 2 hotels (nearly 300 keys).

With a ramp up in the annuity portfolio we expect leasing to contribute Rs 3.7bn in FY20E.

We maintain BUY with a SOTP-based target price of Rs 299 per share.

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