13 November 2020
Results Update | Sector: Real Estate
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
40.1 / 0.5
255 / 91
TP: INR236 (+22%)
Strong rebound in Residential; Office business steady
While Retail and Hospitality are still not out of the woods and normalization
is sometime away, better-than-expected recovery in the Residential
segment and a steady performance in the Office segment continue to
support the overall business.
We remain positive on the medium- to long-term outlook for BRGD, where
our optimism is driven by (a) a robust line-up of launches, (b) a favorable
product mix, and (c) a strong foothold in the markets in which it operates.
Momentum picks up in Residential:
BRGD reported pre-sales of 0.99msf
(down 1% YoY; up 135% QoQ), implying a booking value of INR5,760m (up
9% YoY; 130% QoQ) in 2QFY21. Average price realization was up 10% YoY to
INR5,833, largely driven by a better product mix skewed toward larger
Office steady; Retail recovering gradually:
Leasing revenue was down 9%
YoY, largely impacted by subdued performance in the Retail segment. The
Office segment remained steady, with rent collections at 99% in 2QFY21.
Hospitality continues to reel under lockdown pressure:
occupancies in the Hospitality segment stood at 15% in 2QFY21 (v/s 11% in
1QFY21). The F&B and Banquet businesses are seeing better traction.
Occupancy remains low, impacted by travel restrictions.
In 2QFY21, revenue/EBITDA declined 58%/54%,
while the EBITDA margin expanded 225bp YoY to 28.1%. Adj. PAT-level loss
stood at INR171m in 2QFY21 (est. loss of INR377m and adj. PAT of INR374
Key industry trends in the Residential segment include (a) preference for
ready to move in (RTM) homes, (b) preference for larger homes, and (c)
increased demand from domestic consumers v/s NRIs (in 1QFY21).
~1.4msf of new office leasing is in the advanced stages of discussion across
Better-than-expected recovery in the Residential segment and steady
performance in the Office segment, with traction in incremental pre-leasing
activity across key projects in Bengaluru and Chennai, are key positives for
the company. Furthermore, the revival of Retail and Hospitability to pre-
COVID levels remains a key monitorable.
We expect momentum to continue over the medium-to-long term, driven
by a robust line-up of launches, consolidation opportunities in the
Residential space, BRGD’s strong execution capabilities, and the right
product mix. Maintain
with revised TP of INR236/share.
Financials & Valuations (INR b)
EPS Gr. (%)
Shareholding pattern (%)
FII Includes depository receipts
Residential makes a strong comeback; Commercial remains steady
Key management commentary highlights
Valuation and view
Alpesh Thacker – Research Analyst
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