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Operating performance encouraging

Brigade Enterprises (BRGD IN) posted pre-sales volume of 1.7mn sft, up 1% QoQ/11% YoY, of which new launches contributed 50%. It achieved a sale value of INR 15,244mn, up 22% QoQ/51% YoY. BRGD also posted its highest-ever average realization of INR 8,944 per sq ft, reflecting 20% QoQ and 36% YoY growth. This rise can be primarily attributed to higher proportion of premium inventory in sales. In Q3, BRGD launched four projects, with a saleable area of 2.69mn sft in Bengaluru. Q3 collections dropped 3% QoQ but rose 5% YoY to INR 13.9bn.

Revenue from operations was reported at INR 11,738mn, down 14% QoQ but up 43% YoY. The residential segment contributed INR 8,200mn, Hospitality INR 1,229mn and Leasing INR 2,443mn. Intersegment revenues stood at INR 134mn.

Expect strong sales performance in Q4

For the next four quarters, BRGD has a launch pipeline of 10.8msf, with an estimated gross development value of ~INR 100bn, of which BRGD's share is ~INR 90bn. In Q4, ~2.6msf will be launched in Bengaluru – GDV of these launches is ~INR 18bn, which should aid strong pre-sales performance. For 9MFY24, BRGD has already achieved pre-sales of INR 37bn, which is at 90% of the total pre-sales value for the entire FY23

Valuations: Maintain Accumulate; TP raised to INR 1,153

Besides strong launch pipeline in Bengaluru, BRGD has compelling strategy in place to strengthen its foothold in Chennai, Hyderabad and expand presence in South India. Leasing occupancy has picked up with efforts by the management to fully lease its portfolio. Due to recent strategic land acquisitions, strong business development pipeline and increased visibility of sales, we maintain Accumulate with a higher TP of INR 1,153 from INR 790, on 1.0x one-year forward NAV

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SEBI Registration number is INH000000933