Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Real estate segment saw sales of 1.15 million square feet and revenue of INR1,086 crores.
- Overall price realization reached INR9,483 per square foot, the highest to date.
- Strong demand for new launches and under-construction properties in key markets.
- Leasing portfolio stands at 8.7 million square feet with consistent office rental collections.
- Hospitality segment reported a profit of INR118 crores with high occupancy rates in key markets.
Negative Points
- ARR (Average Room Rate) in the hospitality segment remained stagnant year-on-year.
- Dry days due to nationwide elections hampered restaurant, lounge, and catering revenue.
- Fewer weddings across the country due to fewer auspicious days impacted hospitality revenue.
- Debt levels remain high with a term loan of INR707 crores in the real estate segment.
- Q1 typically shows lower performance compared to Q4, affecting overall quarterly comparisons.
Q & A Highlights
Highlights of Brigade Enterprises Ltd (BOM:532929, Financial) Q1 FY25 Earnings Call
Q: The hospitality portfolio saw an occupancy jump to 75%, but ARR remained stagnant. Are you confident in achieving the previously guided 10% increase in ARR? Also, what is the estimated inventory level in the residential segment and potential for new project launches in the next nine months?
A: Typically, Q1 is softer compared to Q4 or Q3. Revenue increased by 13% compared to Q1 last year. We closed the quarter with approximately 4 million square feet of inventory available to sell. For the Gemini Montrose project in Chennai, we received approvals in Q1 but decided to go to market in July. The project has received a good response. The launch trajectory remains the same as previously shared.
Q: Can you provide the debt figures for each segment and the rental income potential from upcoming commercial projects?
A: Debt numbers remain in the same range as last quarter. For rental income potential, it varies by micro-market. We will get back with specific numbers.
Q: There has been a pause in presales and sales volume in the real estate segment compared to the previous quarter. What are the primary factors for this?
A: It is typical for Q1 to be lower than Q4, which tends to be the highest quarter in the year. Some slowness in approvals due to elections also contributed to the lower numbers.
Q: What is the presale number you are guiding for FY25 for your legacy business?
A: We have not provided guidance and do not share guidance. Q4 numbers were higher, making Q1 look lower in comparison.
Q: How would you rate the response to recent luxury project launches, and will there be a shift in focus towards high-end projects?
A: Both Insignia and Gear Icon in Chennai have been well received. Our strategy remains to evaluate land and fit the best segment and product. We continue to focus on mid-segment housing, but there is also opportunity in the upper mid-segment due to improved economic conditions and purchasing power.
Q: What is the incremental area in the pipeline for leasing, and what is the timeline for these projects?
A: We have about 1.48 million square feet in upcoming launches. This includes projects like Brigade Boulevard in Chennai (800,000 sq ft) and Brigade Padmini Tech Valley (700,000 sq ft). We are awaiting OC for some projects, which should be received in the next few months.
Q: What was the contribution of new launches to Q1 presales?
A: About 35% of Q1 presales came from new launches, including Insignia and new blocks in existing projects like Eldorado.
Q: Can you provide more details on the debt and cash flow disclosures in future presentations?
A: We will take your feedback and aim to include these details in future presentations.
Q: What is the status of the Brigade Twin Tower project and its leasing potential?
A: We are awaiting OC for one tower, which we have started selling. The sales will be reflected in residential sales revenue figures. The remaining tower will be kept for leasing, with sales traction determining future decisions.
Q: What is the breakup of the 1.4 million square feet in upcoming launches?
A: This includes Brigade Padmini Tech-Valley (300,000 sq ft) and Cold Chain for Park (150,000 sq ft). Other projects like Brigade Gujarat Phase 2 (380,000 sq ft) are also included.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
