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Brigade Enterprises – Healthy growth in residential segment

News: Brigade Enterprises (BEL) reported healthy sales volumes driven by recovery post second wave. The company reported sales volume of 1.31 mn sq feet, reporting strong growth of ~33% YoY. The presales (sales value) was up ~44% YoY at Rs.831 crore, with realisations up 8.4% YoY at Rs.6322/sq ft (led by price hikes/ project mix. On financial reported umbers, revenues grew ~142% YoY to Rs.753 crore, driven by strong revenue recognition from real estate at Rs.598 crore.  The revenues from hospitality (up 131% YoY) and rental revenues at Rs.136 crore, up 22% YoY, also saw smart recovery. Reported EBITDA margins were down 281 bps YoY to 25,3% but were lower than our expectation of 27.9%, mainly on account of land cost payout. The company reported PAT of Rs.12 crore (our estimate: loss of Rs. 25.5 crore), aided by superior topline which passed to bottomline.

Views: The volume trajectory has remained healthy. The commentary on recovery of office/retail leasing will also be key as reopening is likely to boost the segment. We also seek further clarity outlook ahead from the management on sales volumes traction, going ahead.