November 28, 2021

Brigade Enterprise Reports Decent Second Quarter Profits

Real estate developer Brigade Enterprise Ltd has made an impressive comeback after the disruption caused by the second wave of the coronavirus pandemic. During the September quarter, its residential segment recorded strong bookings with sales volumes of 1.31 million square feet (m²), up 33% year-over-year (year-on-year) .

Sales value improved 44% year-on-year to ??830 crores. During the quarter, the company launched 0.48 msf, while 2.18 msf is in the works.

Reacting to earnings, the company’s shares rose 2.5% on the NSE in Friday’s opening session.

Its rental portfolio is also regularly renewed with a turnover up 64% year-on-year to ??136 crores. According to company management, there are strong signs of recovery as tenants partially resume their duties. The revival is supported by an increase in inquiries, physical site inspections and market closures. While there is demand for larger spaces, mid-size units are more active in the market, management said. The overall sales consumption of its retail vertical has recovered to 90% of pre-Covid FY20 levels.

In the hotel segment, the occupancy rate increased in Q2 FY22 and stood at 45% compared to 23% in Q1 FY22 and the average room price increased by 12% in Q2 FY22, compared to T1 FY22.

Another comforting factor for investors in this title is the company’s collections which were solid at ??937 crore, up 75% year-on-year. Cash flow from operations at ??213 crore, increased 17% year-on-year. As a result, sequentially, its aggregate gross debt was reduced by ??93 crore and real estate debt reduced by ??122 crores. Net debt decreased by approximately Rs87 crore compared to the previous quarter. Debt reduction led to an improvement in the key net debt to equity ratio from 1.27 times in T2FY21 to 0.83 times in T2FY22. In addition, like its peers, the company is also witnessing a steady decline in the cost of debt, from 9.23% in 2QFY21 to 7.94% in 2QFY22.

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