Brigade Enterprises Analysis

dividend

Pros

• Dividends per share have increased over the past 10 years.
• Dividends paid are thoroughly covered by earnings (6.9x coverage).
• Dividends after 3 years are expected to be well covered by earnings (6.4x coverage).
• Dividends per share have been stable in the past 10 years.
• Brigade Enterprises's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).

Cons

• Brigade Enterprises's dividend is below the markets top 25% of dividend payers in India (3.08%).

future

Pros

• Cash flow for Brigade Enterprises is expected to increase by more than 50% in 2 years time.
• Brigade Enterprises's earnings growth is expected to exceed the low risk savings rate of 7.2%.
• Performance (ROE) is expected to be above the current IN Real Estate industry average.
• An improvement in Brigade Enterprises's performance (ROE) is expected over the next 3 years.
• Brigade Enterprises's revenue growth is expected to exceed the India market average.

Cons

• Brigade Enterprises's earnings are expected to grow by 16.7% yearly, however this is not considered high growth (20% yearly).
• Brigade Enterprises's earnings growth is positive but not above the India market average.
• Brigade Enterprises's earnings are expected to decrease over the next year.
• Brigade Enterprises's net income is expected to increase but not above the 50% threshold in 2 years time.
• Brigade Enterprises is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
• Brigade Enterprises's revenue is expected to increase but not above the 50% threshold in 2 years time.
• Brigade Enterprises's revenue is expected to grow by 11.8% yearly, however this is not considered high growth (20% yearly).

health

Pros

• Brigade Enterprises is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
• Brigade Enterprises is profitable, therefore cash runway is not a concern.
• Brigade Enterprises is profitable, therefore cash runway is not a concern.
• Debt is covered by short term assets, assets are 1.6x debt.
• Brigade Enterprises's cash and other short term assets cover its long term commitments.

Cons

• Debt is not well covered by operating cash flow (12.2%, less than 20% of total debt).
• The level of debt compared to net worth has increased over the past 5 years (105.9% vs 150.6% today).
• Interest payments on debt are not well covered by earnings (EBIT is 1.9x annual interest expense, ideally 3x coverage).
• Brigade Enterprises's level of debt (150.6%) compared to net worth is high (greater than 40%).
• High level of physical assets or inventory.

management

Pros

• The tenure for the Brigade Enterprises management team is about average.

Cons

• The average tenure for the Brigade Enterprises board of directors is less than 3 years, this suggests a new board.
• Mysore's remuneration is higher than average for companies of similar size in India.
• Mysore's compensation has increased by more than 20% in the past year whilst earnings fell less than 20%.

misc

Pros

Cons

• Brigade Enterprises has significant price volatility in the past 3 months.

past

Pros

• Brigade Enterprises's year on year earnings growth rate has been positive over the past 5 years.
• Brigade Enterprises used its assets more efficiently than the IN Real Estate industry average last year based on Return on Assets.

Cons

• Brigade Enterprises's 1-year earnings growth is negative, it can't be compared to the 5-year average.
• Brigade Enterprises's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
• Brigade Enterprises has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
• Brigade Enterprises's 1-year earnings growth is negative, it can't be compared to the IN Real Estate industry average.

value

Pros

• Brigade Enterprises's share price is below the future cash flow value, and at a moderate discount (> 20%).
• Brigade Enterprises is good value based on expected growth next year.
• BRIGADE matched the Real Estate industry (-24.3%) over the past year.
• NSEI:BRIGADE is up 21.6% outperforming the Real Estate industry which returned 13.9% over the past month.
• NSEI:BRIGADE is up 21.6% outperforming the market in India which returned 8% over the past month.

Cons

• Brigade Enterprises's share price is below the future cash flow value, but not at a substantial discount (< 40%).
• Brigade Enterprises is overvalued based on assets compared to the IN Real Estate industry average.
• Brigade Enterprises is overvalued based on earnings compared to the IN Real Estate industry average.
• Brigade Enterprises is overvalued based on earnings compared to the India market.
• BRIGADE underperformed the Market in India which returned -14.5% over the past year.