Brigade Enterprises
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Showing posts with label Brigade Enterprises. Show all posts
Showing posts with label Brigade Enterprises. Show all posts
Monday, February 13, 2012
Monday, February 07, 2011
Wednesday, November 10, 2010
Sunday, September 26, 2010
Wednesday, July 28, 2010
Annual Report - Brigade Enterprises - 2009-2010
BRIGADE ENTERPRISES LIMITED
ANNUAL REPORT 2009-2010
DIRECTOR'S REPORT
To
The Members,
Your Directors have pleasure in presenting the Fifteenth Annual Report on
business and operations of the Company together with the Audited Statement
of Accounts for the financial year ended 31st March, 2010.
Tuesday, July 06, 2010
Sunday, February 07, 2010
Monday, January 25, 2010
Friday, October 30, 2009
Tuesday, August 26, 2008
Friday, May 16, 2008
Brigade Enterprises zooms
Brigade Enterprises rose 12.54% to Rs 215.40. It topped gainers in BSE’s A group shares. The company’s reported net profit of Rs 21.41 crore on sales of Rs 128.11 crore in Q4 March 2008. Figures for the corresponding previous year period were not available. The company announced the results on 24 April 2008.
Chambal Fertilisers and Chemicals rose 8.57% to Rs 79.20. It was the second biggest gainer in A group. The company’s net profit rose 268.4% to Rs 19.38 crore on 22.2% rise in sales to Rs 596.95 crore in Q4 March 2008 over Q4 March 2007. It announced the result on 15 May 2008.
Aban Offshore rose 7.95% to Rs 3,889.65. It was the third biggest gainer in A group. The company’s net profit rose 17% to Rs 34.55 crore on 65.5% rise in sales to Rs 196.39 crore in Q4 March 2008 over Q4 March 2007. It announced the result on 29 April 2008.
JSW Steel rose 7.48% to Rs 1,110.95. It was the fourth biggest gainer in A group. The company said on 14 May 2008 its crude steel production jumped 14% to 2.84 lakh tonnes in April 2008 over April 2007. The company achieved 33% growth in production of rolled long products segments to 34,000 tonnes in April 2008 over April 2007.
Steel Authority of India rose 7.33% to Rs 185.90. It was the fifth biggest gainer in A group. The company reported 24.97% rise in net profit to Rs 2376.76 crore on 30.42% increase in total income to Rs 13855.25 crore in Q4 March 2008 over Q4 March 2007. Steel Authority of India (Sail)’s net profit rose 21.52% to Rs 7536.78 crore on 17.59% increase in total income to Rs 41517.04 crore in the year ended March 2008 over the year ended March 2007. It announced the results during trading hours today, 16 May 2008.
Friday, December 14, 2007
Brigade Enterprises IPO Allotment Status
Brigade Enterprises IPO Allotment Status can be checked here in 2 weeks
Thursday, December 13, 2007
Brigade Enterprises IPO Oversubscription Details
Qualified Institutional Buyers (QIBs) - 18.2861 times
Non Institutional Investors - 4.8861 times
Retail Individual Investors (RIIs) - 5.5945 times
OVERALL - 13.07 times
Wednesday, December 12, 2007
Tuesday, December 11, 2007
Sunday, December 09, 2007
Brigade Enterprises: Invest at cut-off
Investors with moderate return expectations can consider an exposure in the initial public offering of the real-estate developer, Brigade Enterprises, with a two-year perspective.
A reasonable track record of property development, steady growth in revenues and execution of projects through reputed contractors are positives for the company.
Companies with a strong track record, huge land bank and a pan-India presence are those that have recently enjoyed a re-rating by the market. Smaller players with good fundamentals, such as Brigade, have not been able to attract similar valuations. The asking price of Rs 351-390 for the company does appear stiff at this juncture, given that it is a relatively small player with geographic concentration and a business model that is not too differentiated from some of the recently-listed players in the region.
However, the ongoing projects, if completed and sold on time, may help the company command better valuations. Based on this earnings assumption, the offer price values the company at 16-18 times its expected earnings for FY-09.
Brigade is a real-estate developer with a majority of its projects executed in Bangalore.
The company is primarily focussed on residential properties with experience in commercial and hospitality projects as well. It has so far executed 5.67 million sq. feet of saleable area. The issue proceeds are to be used for constructing ongoing projects and acquiring land.
Comfortable track record
Brigade has in the past executed projects across real-estate domains and has not narrowed its operations to specific segments.
While, broadly, it has presence in residential, commercial and hospitality segments, it has further diversified its activities within these domains. For instance, in the residential segment, the company is among the earlier players to venture into integrated enclaves, together with apartment buildings for the middle and high-income group.
Integrated enclaves, which are self-contained gated communities, have enabled the company attain development qualification in residential, commercial, retail, hospitality and other basic infrastructure projects simultaneously.
That 75 per cent and 66 per cent of two on-going projects have been pre-sold also reflects the increasing demand for such gated communities in metropolitan cities such as Bangalore.
In the commercial space, the company has a mix of lease and sell models. In the hospitality segment, it is now managing two serviced residence properties with more such ongoing projects and has also tied-up with brands such as Accor and Sheraton for running hotels and resorts.
We believe that the enclave projects and hospitality segments have the potential to aid profit margins.
These relatively recent ventures appear to have contributed to a jump in operating profit margins from 20 per cent in FY-05 to 31 per cent in FY-07.
The half-year ended September has further taken the OPMs to about 40 per cent. That the enclaves have also brought in high volume is evident from revenues jumping from Rs 162 crore to Rs 402 crore over FY-05 to FY-07.
With its past record, Brigade’s ongoing projects of 12.53 million sq. ft (about twice the projects executed so far) do not appear too challenging to execute.
That the company has in the past tied-up with Simplex infrastructures and B. E. Billimoria and Company also provides confidence to the timely execution of construction contracts.
With a number of developers having huge developable area, sub-contracting to qualified contractors may be the more prudent way for them to ensure timely and quality execution.
Risks
Of the total land reserves of 44 million sq. ft of developable area, about 35 per cent are yet to be registered in the company’s books and are still in the agreement stage.
The forthcoming projects of the company (about 30 million sq ft. of developable area) may face the risk of delays in take-off if such land is not transferred soon.
Further, a portion of the reserve, which is agriculture land, will be held in the name of some individuals on behalf of the company until it is converted.
Any roadblocks in such conversion could also disrupt future projects. We have, therefore, considered only ongoing projects for our valuations.
That the company has a relatively low-land bank also implies that future parcels would be purchased at higher cost, posing risk of spiking operating costs.
Cost of land has gone up from 15 per cent to 31 per cent of the total project expenses between 2004 and 2007.
Saturday, December 08, 2007
Brigade Enterprises IPO Analysis
Originally set up as a partnership firm (Brigade Enterprises) between M R Jaishankar and Gita Shankar in 1990, Brigade Enterprises (BEL) was converted into a private company in 1995 and a public company in July 2007. It develops residential, commercial and retail properties primarily in Bangalore and Mysore, and has also developed and is managing around 115 serviced apartments under the brand, Brigade Homestead.
Since 1990 BEL has completed and delivered around 67 projects aggregating about 6.7 million square feet (sq ft) of space comprising residential (71% of the total developed area), commercial (IT parks/office buildings constituting 26% of the total developed area), and hospitality ventures (3%).
Land reserves stood at 403.45 acres with an estimated developable area of 44.16 million square feet on 23 November 2007. The reserves consist of land owned directly/indirectly: 112.13 acres (27.8% of the total land reserves)/14.2 million sq ft (32.2% of the developable area), land with sole development rights: 102.91 acres (25.5%)/4.83 million sq ft, land for which memoranda of understanding (MoU) for acquisition has been inked: 133.10 acres (33%)/ 16.38 million sq ft (37.1%), and land under joint development: 55.31 acre (13.7%)/8.75 million sq ft (19.8%). Of the total land reserves, about 56.5% is in Bangalore, 18.7% in Mangalore, 12.2% in Chickmagalur, and the balance in Mangalore, Chennai, Hyderabad and Kottayam.
On the land reserves, BEL is developing two integrated lifestyle enclaves (Brigade Gateway and Brigade Millennium), 12 residential properties, and two hospitality properties aggregating 13.84 million sq ft of developable area with a saleable area of 12.53 million sq ft on 23 November 2007. Brigade Gateway Hospital, the hospital project, is part of the integrated lifestyle enclave of Brigade Gateway and will become operational in another two-three months (interior, electrical and hospital equipment installation work is pending). The 200-bed hospital will be managed by Columbia Asia Hospitals and bring diversity to the revenue stream. Moreover, 18 projects are in the initial stage of development and necessary regulatory approvals are being obtained.
BEL engages external professionals for designing and construction of the projects in addition to its in-house competency developed over the years at every stage of the property lifecycle: land identification, project conceptualisation, and construction management, marketing and delivery. Leveraging the external expertise to specific tasks allows the company to focus on identifying appropriate land, project conceptualisation and marketing. Currently, majority of aggregate developable area is subcontracted to BE Billimoria & Company, Simplex Infrastructure, and Ahluwalia Contracts India.
Currently, BEL is constructing five hospitality properties in Bangalore including two service apartments and one hotel. In addition, the company is also about to start work on two hotels: one each at Mysore and Devanahalli (Bangalore), and two resorts: one each at Kottayam and Chickmagalur. The operation and management of these hospitality properties will be through arrangement with international hotel operators such as Starwood, Intercontinental, Banyan Tree and Accor. The company has signed agreement/ letter of intent (LoI) with these international hotel chains. Subsequent to the completion of these projects, BEL is expected to directly/ indirectly own or manage over 1,500 keys. The income from hospitality was just 2.2% of the income from operation in the financial year ending March 2007 (FY 2007) and 2.6% in the first half year ended September 2007. The rental income from commercial and retail properties was 3% and 3.2%, respectively.
Besides Bangalore, BEL has taken up a few projects in Mysore and recently initiated some development activities in other parts of south India including Mangalore, Hyderabad, Chennai.
BEL is tapping the capital markets to fund the Rs 47.97-crore acquisition of 41.85 acres of land in Bangalore and Kottayam, the Rs 512.04-crore construction and development cost of ongoing and forthcoming projects, and gemeral corporate expenses.
Strengths
An established player in the Bangalore realty market. Has successfully executed and delivered around 67 projects aggregating around 6.7 million sq ft of space comprising residential, commercial and hospitality properties.
Though revenue from management of serviced apartments is minimal currently, the development of five hospitality properties will significantly diversify the revenue base in the medium term.
The integrated lifestyle projects will fetch the company a 5%-10% premium over normal residential properties.
Weakness
The two integrated lifestyle projects, Brigade Gateway at Malleshwaram and Brigade Millennium at Whitefield in Bangalore, account for about 10.84 million sq ft of saleable area of the 12.53 million sq ft under construction and spread over 6 projects. Of late prices at Whitefield are stagnating due to glut in available properties. Also, just about 67% of the total space at the Whitefield property has been sold and hence vulnerable to fall in realty prices in these micro markets.
Interest cost has spiked from 6.9% in FY 2007 (on loans end March 2007) to 11.2% (annualised on loans end September 2007) in the six months ended September 2007. In the process, the interest cost has zoomed to Rs 17.25 crore in the six months ended September 2007. This is even higher than Rs 16.56 crore incurred in the entire FY 2007. The spike in interest cost can hurt, specially during a downtrend.
Current land reserves of 403 acres comprise acquisitions in the last one or two years, which was a period of hot realty prices. Thus, profitability is at risk if property prices cool down.
About 100.69 acres amounting to 24.96% of the total reserves is agriculture land. Realty development here is subject to conversion of that land.
Valuation
Consolidated revenue excluding other income recorded a growth of 103% to Rs 409.99 crore and net profit after accounting for share of profit from associates 70% to Rs 71.50 crore in FY 2007. EPS after adjusting for EO works out to Rs 6.3 on post-IPO equity. On the offer price band of Rs 351-Rs 390, the P/E is 56.7-61.9 times. Comparatively, Sobha Developers quotes at a P/E of 40.5 times and Puravankara Projects at 83.4 times.
Spike in interest cost, relatively low land bank compared with peers, relatively high cost of existing land bank, high concentration on a couple of projects, more of a regional play with focus on Bangalore seeing a glut of late are key concerns.
Tuesday, December 04, 2007
eClerx, BGR Energy, Transformers, Brigade Enterprises, Jyothy Lab
eClerx Services 270 to 315 95 to 100
BGR Energy 425 to 480 380 to 400
Transformers & Rectifiers 425 to 465 180 to 200
Brigade Enterprises 351 to 390 110 to 120
Jyothy Lab. 690 230 to 240
Burnpur Cement Ltd. 12 2 to 3
Edelweiss 825 780 to 800
Renaissance Jewellery 150 20 to 25
Kolte Patil 145 75 to 80
Kaushalya Infra 60 13 to 14
SVPCL 42 - 3 to -4
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