Ladies and gentlemen, good day, and welcome to Q1 FY 2025 earnings conference call of Brigade Enterprises Limited. We have with us on call today the management of Brigade Enterprises. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mrs. Pavitra Shankar, Managing Director. Thank you, and over to you, ma'am.
Hi, good afternoon, everybody. Welcome to the Brigade Enterprises Q1 FY 2025 earnings call. I'm joined by our Joint Managing Director, Ms. Nirupa Shankar, our Executive Directors, Mr. Roshan Mathew, Mr. Amar Mysore, and Mr. Pradyumna Krishnakumar, our CFO, Jayant Manmadkar, and the members of our senior management team. The real estate segment continued to be the primary driver of our performance, while other segments made healthy contributions. We believe that our multi-domain approach enabled us to continue to capitalize on emerging opportunities. In Q1 FY 2025, the real estate segment saw sales of 1.15 million sq ft and revenue of INR 1,086 crore. The overall price realization continued its upward trajectory, coming in at INR 9,483 per sq ft this quarter, which is our highest till date.
This reflects the demand on ground for properties with more spacious floor plans, extensive amenities, and upscale finishes, underscoring the premiumization trend in consumer behavior. We are still seeing strong demand for new launches as well as under construction properties. In our key markets, end users remain the largest buyer segment. The recent news of the indexation benefit for capital gains on realty investments is a positive move. In Q1 FY 2025, the Brigade leasing portfolio stands at 8.7 million sq ft, with consistent office rental collections. Across the office segment, GCCs, flex space operators, GSIs, and technology firms continued to drive leasing activity. The increasing utilization rates of office spaces are prompting occupiers to review their leasing and portfolio strategies to accommodate their expansion plans.
The significant retail category performers across all our three malls were family entertainment centers, electronics, along with books and specialty lifestyles. Our two neighborhood malls had new brands added in the electronics category that propelled this category. We are witnessing a positive leasing transaction across our retail portfolio in terms of new family entertainment centers and F&B restaurants. The hospitality industry in India in Q1 saw Chennai and Bengaluru with the highest year-on-year ARR growth among the top 10 markets in the country, surpassed only by Hyderabad. In Mysuru, the hotel market is becoming increasingly competitive, leading to improved amenities across the board. State-specific events, including Indian Super League and Indian Premier League matches, and MICE business, contributed significantly to higher occupancies across the country. However, dry days owing to nationwide elections hampered restaurant, lounge, and catering revenue.
There were also fewer weddings across the country due to fewer auspicious dates. This brings me to the end of our operational highlights. Our CFO, Jayant Manmadkar, will now take you through the financial highlights.
Thank you, and good afternoon. On behalf of the company, we welcome you to the earnings call for Q1 FY 2025. Our managing director has given operational highlights. I will now be sharing key financial highlights for the quarter. Brigade Group has reported real estate sales of 1.15 million sq ft, with a sales value of INR 1,086 crore at an average realization of INR 9,483 per sq ft. The real estate segment clocked a turnover of INR 707 crore. Leasing segment clocked a turnover of INR 259 crore. Hospitality segment clocked at INR 118 crore. The consolidated revenue, including other income, for quarter one, FY 2025, stood at INR 1,113 crore.
Consolidated EBITDA for quarter one, FY 2025, stood at INR 328 crore. Consolidated tax after minority interest for quarter one, FY 2025, is at INR 60 crore. Coming to the debt and liquidity position, we continue to have adequate liquidity and undrawn credit lines from the financial institutions to support our growth plan. I will hand it back to operator for questions.
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Saksham from Ambit Capital. Please go ahead.
Hello, good afternoon. Firstly, Nirupa, on the hospitality portfolio, while the occupancy jumped to 75% is impressive, if the ARR on year-on-year is stagnant? Your previous guidance was of a 10% increase. So are you confident this target will be achievable? And like moving on to the residential segment, Pavitra, what is the estimated inventory level in the residential segment? And what is the potential for new project launches in next nine months that we can expect? Lastly, on the Chennai Mount Road project, what insights can you share about the Chennai market in relation to the project launch, considering it, it was in late quarter? Any challenges that you faced as compared to the Bengaluru market? And that's from my end.
Hi, good afternoon. Thank you for the question. So typically, what we've seen is that Q1 is generally a slightly softer quarter compared to Q4 or Q3. The revenue that we've seen is actually gone up by 13% if we compare it to Q1 of last year. And the typical hospitality strategy varies between an occupancy versus an ARR strategy. So in this case, we're focused on improving our occupancy, so that has increased by 9% or so, and the balance has come from the ARR. So as I mentioned, there's been a 13% improvement in the revenue from this quarter compared to the same quarter last year.
Okay.
Yeah.
Thank you.
Yeah. Coming, coming to your question about inventory, we actually closed out the quarter with 4 million sq ft or approximately in terms of inventory available to sell. Your question on Chennai, we actually, we received RERA for the Brigade Icon project on Mount Road in Q1 itself. But given the nature of the project, we decided to actually go to the market in July. So there's no issue in terms of getting approvals. The market is-- I'm sorry, the project is being sold as of today in the Chennai market and has received a good response.
Okay. And potential launches in next nine months that we can expect?
It is, as we had, shared in the previous quarter, the launches trajectory remains the same. Whatever we have launched has been replenished in the land bank as well.
Sure. Thank you.
Thank you. The next question is from the line of Rakesh Wadhwani from Monarch Networth Capital. Please go ahead.
Hello? Hello, am I audible?
Yes, sir.
Hello? Hello.
Yes, sir, you are audible.
Okay. Okay, thank you for the opportunity, and congratulations to the management for the great set of numbers and a couple of deal, land acquisition deals that have been announced on the BSE in the last one quarter. First question with respect to the debt. So this time, the management has given the total debt for the company level. It will be great if you can give us the debt with respect to the segment as well as the net debt, because we have a great amount of cash also when we see the last year, and the share of the debt for the company, not excluding the share of the, like, associates.
Yeah, Jayant here. So the debt numbers, they remain more or less in the same range as, what we have seen it in the last quarter presentation, so you can take it, on the same lines.
Okay. Awesome. Fine. Fine. Coming to the commercial project pipeline that has been given in the PPT, can you just help us with the rent potential or the rental income potential from the particular projects t hat are supposed to be launched?
Yeah. So for these, I think it depends on each micro market.
Yeah.
We'll get back to you on these numbers. It will vary, micro market to micro market. We have to figure exactly when these will come into the market, what will be the leasing traction for each of these, and then calculate. We'll get back to you on this.
Okay. Okay, fine. Thank you. A query related to that, the Brigade Twin Towers is supposed to come for a launch or the leasing in this FY 2025?
Yes. So this one we are actually awaiting the OC for this. But some, what we have decided to do is that one tower we have started selling. The sales will actually showcase in the residential sales revenue figure. And one tower we have already started pre-selling.
Okay. Okay, fine. Fine. Thank you. And with respect to the GDV that we have seen couple of updates from the BSE regarding the new project that we have signed up with the partner or the land parcel that we acquired. Can you please help us, what is the GDV, the value, the GDV we have done with respect in the Q1, like the land acquisition, business development side?
Which project are you?
So I'm not, no, I'm, no, no, no, I'm referring to the number of projects or the business development that we have done in the particular quarter. Total development. Total development.
So, I'm here. So, as mentioned already, about 517 acres is the land bank that we have, for this particular quarter gone by. In terms of the data points, whether it is the GDV, et cetera, similar to what we mentioned in the last earnings call, we are about overall INR 50,000 crore number for the GDV, of which Brigade's share is about INR 39,000 crore.
INR 39,000 crore. Okay. And with respect to the launch pricing, we, we have guided last, like, in Q4, that we'll be launching the projects with a GDV of INR 10,000 crore-INR 11,000 crore. The, is that the guidance in that?
Yeah, that is, similar to what we mentioned earlier.
Fine. Right. Thank you, sir. Best wishes. Thank you.
Thank you.
Thank you. The next question is from the line of Dhruv from B&K Securities. Please go ahead.
Yeah, thank you for the opportunity. In the real estate segment, there has been a fall in the terms of pre-sales and sales volume compared to the previous quarter. Could you please elaborate on the primary factors that contributed to this fall?
Yeah, it's fairly typical for Q1 to be running at a lower rate than Q4. In fact, across the industry, Q4 tends to be the highest in the year, so we're not too worried about it. Also, there were some slowness in approvals due to elections, et cetera. So as a result, numbers look low compared to Q4. But this should not be you know taken as anything out of the ordinary.
Okay.
Mr. Dhruv, does that answer your question?
Yeah, that answers my question.
Thank you. The next question is from the line of Parvez Qazi from Edelweiss Public Alternatives. Please go ahead.
Yeah. Hi, team. So, just one clarification. What is the pre-sale number that you are guiding for for FY 2025 for your RE business?
We have not given guidance, and we actually don't share guidance.
Sure. All right. No, so that's fine. But you, I mean, with the previous question you answered that it could be something that you had, you know, probably highlighted in the last quarter. So is that, is my understanding correct?
No, what I said was that in Q4, the numbers were much higher. So Q1, as in comparison, looks substantially lower. And industry-wide, Q4 tends to be the highest quarter in the financial year, across the industry. So in comparison, Q1 looks low.
Fair point. And just, just one feedback, right, to the entire team, right? This time around, if I look at your presentation, the, I mean, few of the slides have been missing, which have always been a part of the presentation in terms of upcoming product launch, project launches, for example, cash flows and, you know, segment-wise, cash flows and debt. If you can, you know, continue giving those disclosures from next quarter onwards, that would be very helpful. Thanks a lot, and all the best.
Thank you. We'll take your feedback. Thank you.
Thank you. The next question is from the line of Pritesh Sheth from Motilal Oswal. Please go ahead.
Yeah, thanks for taking my question. Good afternoon, everyone. So first is on, you know, the couple of luxury launches that you have had in Q1, and, you know, probably Icon also in Q2. Now, how would you rate the overall response to both these projects? You know, if I am correct, probably Insignia would have contributed roughly INR 150 crore of pre-sales this quarter, which was probably 15%-20% of the GDV that you have launched. So how would you rate that sort of contribution?
You know, your overall strategy going forward, you know, would you be, in terms of the project mix, would you be now shifting focus more towards these luxury projects, or you would have a, you know, favorability towards, mid-income kind of projects which have, you know, anyways, done well, in terms of sales velocity for us? So just probably your comments on those two points.
Yeah. Thank you. So, yes, in the last quarter, so Q1, we launched Insignia, and since the end of Q1, we've also launched Brigade Icon on Mount Road in Chennai. Both have been really well received. Both projects, our strategy there is not to go for sales velocity, but rather see the acceptance of the product at the price that we launched it at, and both have done well on that regard. Insignia has done extremely well. We've been able to move the project at a decent pace as well. And in terms of what we would look at from a product standpoint, I think our approach continues in the same as the past.
Whatever is the land that we're evaluating, we look to put the best fit in terms of the segment and also in terms of the product that's appropriate at that point in time. Of late, it has certainly seemed like there are some land parcels that have lent themselves to ultra high end, but we are also, you know, constantly seeing land parcels and also some of our upcoming launches will continue to be in the mid-segment product category.
Sure. Just one follow-up on that. I think, you know, prior to 2017, you know, we were largely into this, higher ticket size, kind of segment, you know, where we were selling flats, you know, between INR 1.5-INR 4, you know, INR 5 crores, where velocity was low and hence, you know, inventory started to build up how different, that market was versus, you know, what you see currently? I mean, in, in terms of response that you have seen in these couple of launches, you know, does it indicate that, you know, that market was done and this market is doing better than, you know, that, phase?
I think market conditions are very different now versus prior to 2017. Naturally, the market itself or the industry itself has been through sea changes. Our portfolio as well has actually continued to stay in mid-segment, but the pricing of what is considered as mid-segment has moved dramatically. So prior to, I would say even two years ago, the average price band for mid-segment in Bangalore, for example, would have been around INR 60 lakhs to around INR 80 lakhs or maybe even INR 90 lakhs. Now I would say that's comfortably upward of INR 90 lakhs to INR 1.2 crore. So there is an overall change in the market itself in terms of what qualifies as mid-segment, and that's due to multiple factors, mainly affordability and growth in per capita income as well.
So, we haven't really changed our approach. We still believe in mid-segment housing. But there is also a lot of opportunity in upper mid-segment housing due to the general improvement of the country, the economy, and purchasing power of the demographic.
Sure. And second, on the launches, when you mentioned that, the launch trajectory or expectation guidance remains same, but, you know, will it be largely second half tilted, or you are seeing those launches, you know, start improving from second quarter itself, from year on? And, you know, how is the trajectory is looking, going on?
I think it will still be skewed towards the second half. I mean, we've been seeing that sort of trend over the last as well, so very similar to the past.
But, I mean, in terms of launches, second quarter should be healthier than the first quarter, or, you know, it could be similar to what we have seen in first quarter?
Similar to what we achieved in first quarter.
Okay.
Maybe, we're not sure because of approvals.
Yeah. Yeah. Sure. That's it from my side, Sona. I have a couple more questions, but I'll join back with you. Thank you.
Thank you. The next question is from the line of Abhishek Khanna from Kotak Securities. Please go ahead. Abhishek.
Hello?
Your line has been unmuted. Yes, sir.
I'm audible.
Go ahead.
Just one question: Of the existing lease area that you have of 8.7 million sq ft, I just wanted to understand, what is the incremental area that is in pipeline? I understand there are two projects that you started this quarter, plus you had one in Thiruvananthapuram. So could you just let us know what is the area that all of those add up to? So Brigade Square.
So, uh.
The two that you started this quarter, this quarter, one of which I think is in Chennai, the other one's in Bangalore.
Yeah. So we've actually shared the launches. So we'll be launching about 1.48 million sq ft. So that includes. Sorry. Yeah. One second. You were asking about the upcoming launches or already launched projects?
By launch, you mean the ones that are under construction, right?
Yes, yes, yes.
Both, actually.
I'll tell you. We have Brigade Tech Boulevard in Chennai, so that's about 800,000 sq ft. We have Brigade Icon, completed construction, which is awaiting OC. That's about 1.3 million sq ft. We have Brigade Padmini Tech Valley. There's Block B, which is around 700,000 sq ft. That has Block A, B, and C. So we've already. A gain, Block A is already almost completed construction, which is waiting for OC. That's about 264,000 sq ft. And Padmini Tech Valley, Block B, is about 700,000 sq ft. And Brigade Square in Thiruvananthapuram is around 200,000 sq ft. And yeah, that's about it. So that's what we have as already launched.
And the second one that you mentioned, 1.3, was, you're referring to Twin Towers, is it? Sorry.
Twin Towers? Yeah, we are still awaiting OC, so I cannot say it's completed just yet. We're still awaiting OC, and that should be, we should be able to get it in the next couple of months.
Just to confirm, you plan to strata sell Twin Towers, everything else will go to leasing, is it? Is that.
Yeah. What we're planning to do is about 50% sale. One tower we will strata then, and the remaining will be kept for leasing. But the sale has been based on the market acceptance, the sales traction is quite good, so we will determine as and when by each quarter. But as of now, one tower we plan to strata sell.
Which is 0.6 million sq ft broadly, is it?
That's right.
Got it. Could you also let us know the ones that are to be launched, the 1.48 that you just mentioned, what is the breakup of them and the plot timings?
No, I'll just, so basically, we have Brigade Padmini Tech Valley, which is a block, so that's around 300,000 sq ft. And, I think Kochi Info Park, again, this is all in the upcoming in the next four quarters, which is already mentioned. Kochi Info Park, as mentioned last quarter, is about 150,000 sq ft. And those are the main two. I think, Brigade Gujarat has already been mentioned, the phase II, about 380,000 sq ft.
Perfect. Perfect. Thank you. Just one last question: Is the understanding correct that Q1 pre-sales of INR 11 billion broadly had very little or negligible contribution from the two launches that you had? Because one of them happened towards the end of the quarter, the other one you're saying you started to sell only in July. So is it safe to say that the contribution from the new launches was next to negligible?
No, the two launches mentioned by someone previously, one of them was actually only in July. So what I said was that. Oh, sorry, are you talking residential or commercial?
No, residential. Sorry, residential.
Yeah, yeah. Yeah. So, previously someone had mentioned two projects, Insignia and Icon. Insignia is in the Q1 numbers. Icon is in, will not be in the Q1 numbers, because although we got RERA, we didn't take any of the sales in Q1, but that will show up in Q2 eventually. But, in Q1, about 35% was from new launch.
Which is broadly from Insignia, you're saying?
Insignia, and there were a couple of other projects that launched as well. There's a new block in Brigade Eldorado, so that is also the other main contributor.
Perfect. Okay, that's it. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I would now like to hand the conference over to Mrs. Nirupa Shankar, Joint Managing Director, for closing comments.
Once again, good evening, everyone. Before we close, we'd like to share a couple of other highlights. Our Brigade Foundation, which is the philanthropic arm of Brigade Group, inaugurated the first phase of the Brigade-B CIC Skill Development Academy, short form BBSDA. It is a center of excellence with state-of-the-art infrastructure on a 5-acre parcel of land in Aerospace Park in Bangalore North. We launched this in association with the Bangalore Chamber of Industry & Commerce, and it's a not-for-profit initiative that aims at making a positive contribution to the lives of the unemployed and underemployed people, apart from meeting the needs of the industry. The skill development academy will focus on construction, hospitality, tourism, manufacturing, and retail sectors, and skill potential candidates to make them employable to their full potential.
We're also happy to share that the Brigade Enterprises Limited was recognized among the top 100 great mid-sized workplaces by the Great Place To Work Institute. We secured the 38th rank across the country and across industries. Also recognized as a laureate for being in the top 100 workplaces for more than 10 years in a row. Brigade Hospitality Services was ranked 67th in the same survey. The Indian Music Experience Museum celebrated its 5th anniversary in July. The IME came into being as a community development initiative to educate, especially the younger generation, about the diverse and rich musical heritage of our country. The IME is a fantastic place for all generations to visit. We will be launching our 9th hotel, ibis Styles Mysuru, under the management of French multinational Accor.
This will be our second hotel in Mysuru, completing the existing, complementing the existing, Grand Mercure Mysuru, showcasing a selection of 130 well-designed rooms and extended stay suites. The 17th edition of our flagship property expo, Brigade Showcase, will commence from August 9- 11 at Sheraton Grand Bangalore Hotel at Brigade Gateway. This year's showcase will feature over 20 exceptional Brigade projects, ranging from INR 49 lakhs to 21 crores in the cities of Bengaluru, Chennai, and Hyderabad. Our Chairman, M.R. Jaishankar, was honored with the prestigious Lifetime Achievement Award by the Karnataka Arya Vysya Mahasabha at the 5th Vasavi Awards of Excellence 2020, honoring his invaluable contribution to the real estate industry and community development. Our co-working brand, Buzzworks, has launched seats in the first center in Hyderabad at Urbando Orbit HITEC City, and it is spread across 31,000 sq ft.
Vineet Verma, Director of Brigade Hospitality, has been appointed as the President of BCIC for the term 2024-2025. Brigade Plus, which is our interior solutions arm, has partnered with leading global brand IKEA to offer well-designed, functional, and affordable home furnishing solutions to the residents of Brigade Eldorado. On that note, we would like to conclude this quarter's earnings call. Thank you all for taking the time to hear from us today.
Thank you. On behalf of Brigade Enterprises Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.