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Dolat Capital Report
Brigade Enterprises Ltd.'s presales at Rs 7.95 billion (our estimate: Rs 7.8 billion) declined 4% YoY and 2% QoQ fully explained by volume decline of 9% YoY and 2% QoQ. This takes H1 FY23 presales at Rs 16 billion (2.4 million square feet) with Bengaluru likely accounting for ~80% of the overall volume mix.
The developer presales guidance for FY23 ranges between Rs 35-40 billion (our estimate: Rs 34 billion).
Free cash flow of Rs 2.4 billion was aided by robust collections of Rs 14.2 billion (up 17% QoQ; up 51% YoY) and limited retirement of pending land liabilities amounting to more than Rs 10 billion.
The gross development value attributable to the land liabilities implies cost of land relatively high at ~one third, thus, likely remaining a drag on profitability.
Residential EBITDA margin in H1 FY23 stands at 13%. Brigade Enterprises plans on retiring ~Rs 6 billion of the pending land liabilities in H2, thus, likely consuming majority of the FCF generation.
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