30-Oct-2026 19:20:27
BRIGADE ENTERPRISES Q2 CONCALL: RETAINS ₹9,000 CR FY27 PRESALES GUIDANCE, TARGETS ₹5,000 CR RESIDENTIAL REVENUE AT 22–24% EBITDA MARGIN; ₹7,600 CR H2 LAUNCH PIPELINE, ₹1,700 CR FY29 RENTAL INCOME & ₹13,000 CR NEW PROJECT GDV
• FY27 Presales Guidance: Management reiterated its residential presales target of approximately ₹9,000 Cr, supported by upcoming township launches in Bengaluru and additional projects in Chennai and Hyderabad. • H2 FY27 Sales Outlook: Management expects a substantial improvement in presales during H2, supported by the launch of large residential projects and continued sales from existing inventory. • FY27 Residential Revenue Guidance: Management expects approximately ₹5,000 Cr of residential revenue recognition during FY27, subject to project completion, occupancy certificates and registrations. • FY27 Residential EBITDA Margin Guidance: Management expects real estate EBITDA margins of approximately 22–24%, supported by higher-margin projects reaching revenue recognition milestones. • FY27 Operating Cash Flow Guidance: Management expects full-year operating cash flow to exceed FY26 levels, supported by stronger H2 collections and new project launches. • FY27 Debt-to-Equity Guidance: Management expects consolidated debt-to-equity to remain below 0.5x by March 2027, compared with 0.31x in September 2026. • FY29 Rental Income Guidance: Management expects annual rental income of approximately ₹1,700 Cr by FY29 as additional commercial and retail assets become operational. • FY29 Operational Leasing Capacity: Management expects the operational leasing portfolio to expand from approximately 9.6 million sq. ft. to around 12.5 million sq. ft. by FY29. • H2 FY27 Launch Pipeline: Company plans to launch approximately 7 million sq. ft. of residential projects with an estimated gross development value of ₹7,600 Cr. • H2 Launch Composition: Approximately 5 million sq. ft. of planned launches are in Bengaluru, 1 million sq. ft. in Hyderabad and 1 million sq. ft. in Chennai. • Bengaluru Township Launches: Management is targeting two large township launches in Bengaluru during Q3 FY27, although one project could move into Q4 depending on approvals. • Bengaluru Township GDV: The two planned township projects together carry an estimated GDV of approximately ₹3,800 Cr. • Township Locations: The upcoming projects are located in the Whitefield–Hoskote corridor and North Bengaluru. • Q4 Residential Launches: Management plans additional residential projects in Bengaluru and Chennai during Q4 FY27. • Chennai Launch Timeline: One major Chennai project is targeted for January 2027, while another could be deferred into FY28 depending on approvals. • Chennai Launch Pipeline: Management clarified that only one approximately 1 million sq. ft. Chennai project is included in the stated 7 million sq. ft. H2 launch pipeline. • Residential Launch Demand: Management expects strong customer absorption from upcoming Bengaluru and Chennai projects, particularly in the ₹1–2 Cr housing segment. • Residential Product Mix: Management indicated that most upcoming Bengaluru projects target relatively affordable premium and mid-market ticket sizes, with a smaller portion priced near ₹3 Cr. • Bengaluru Residential Outlook: Management expects demand to remain healthy despite uncertainty around IT-sector employment and AI-related workforce changes. • Premium Housing Demand: Management indicated that demand for higher-end residential properties remains resilient, supported by end users, GCC employment and broader economic activity. • Residential Pricing Outlook: Management expects disciplined price increases and a greater premium housing contribution to support realizations. • Q2 Residential Realization: Average residential realization increased approximately 29% YoY to ₹13,841 per sq. ft. • Residential Inventory: Company has approximately ₹9,800 Cr of existing residential inventory available for sale. • Residential Sales Mix: Approximately two-thirds of Q2 sales volume came from existing projects, with the remaining contribution from new launches. • Sustenance Sales Outlook: Management expects ongoing projects to continue generating healthy sales during H2, alongside the contribution from new launches. • Major Sustenance Projects: Brigade Eternia, Brigade Belvedere, Brigade Insignia, Brigade Gateway Hyderabad and Brigade Icon were identified as major contributors. • Brigade Barcelona Performance: The Neopolis, Hyderabad project generated approximately ₹475 Cr of sales during its launch quarter. • Brigade Barcelona FY27 Outlook: Management expects another ₹300–325 Cr of sales from Brigade Barcelona during the remainder of FY27, potentially taking full-year sales close to ₹800 Cr. • Brigade Barcelona Ticket Size: Apartments are priced around ₹4 Cr per unit, positioning the project within Hyderabad's premium residential market. • Hyderabad Residential Outlook: Management remains confident in demand for premium homes, although it acknowledged that Brigade Barcelona's sales absorption is slower than that of Brigade Gateway Hyderabad. • Brigade Misty Greens: Management indicated that almost all available inventory at the Mysuru project was sold following its Q2 launch. • Q2 Residential Launches: Company launched approximately 2.4 million sq. ft. across Brigade Barcelona, Misty Greens and Azalea at Brigade Meadows. • Q2 Launch GDV: The new residential launches represented approximately ₹3,000 Cr of estimated development value. • New Project Acquisition: Company added approximately 12.5–13 million sq. ft. of development potential during H1 FY27. • New Project GDV: Management estimated approximately ₹13,000 Cr of GDV from the development potential added during H1. • Q2 Business Development: Approximately 10 million sq. ft. of the H1 land and development additions occurred during Q2. • Land Acquisition Strategy: Company remains focused on opportunities in Bengaluru, Hyderabad and Chennai, with particular emphasis on East and West Bengaluru. • Land Acquisition Payments: Company incurred approximately ₹440 Cr of land payments, broadly split between Bengaluru and Hyderabad. • Pending Land Commitments: Management indicated that approximately ₹2,000 Cr or more of land-related payments remain outstanding, with most expected over the next year and some linked to joint development milestones. • Residential Revenue Recognition: Management indicated that revenue recognition depends on occupancy certificates and registrations rather than the timing of customer bookings. • FY28 Residential Guidance: Management did not provide a specific FY28 residential revenue or EBITDA margin forecast, citing uncertainty around project completion timelines. • Commercial Leasing Outlook: Management expects rental income to increase over FY28–FY29 as new office and retail properties are completed and leased. • Commercial Operational Portfolio: Company's operational leasing area increased to approximately 9.6 million sq. ft. during Q2. • Commercial Portfolio Occupancy: Overall occupancy stood at approximately 90%. • Commercial Office Revenue: Office-only rental revenue increased approximately 8% YoY to ₹201 Cr. • Rental Collection Efficiency: Management indicated that office rental collections remained approximately 99%. • Commercial Leasing Activity: Company transacted approximately 6 lakh sq. ft. during Q2 across new leases, renewals, sales and investor-related space transactions. • WTC Bengaluru Leasing: Management reported approximately 1 lakh sq. ft. of leasing activity at World Trade Center Bengaluru. • Brigade Twin Towers: Company completed approximately 1 lakh sq. ft. of commercial space sales at Brigade Twin Towers. • WTC & Twin Towers Outlook: Management is targeting further leasing and sales during H2 FY27, supported by an active occupier pipeline. • Commercial Rental Escalation: Management indicated that typical contractual office rent increases remain approximately 5% annually. • Commercial Re-Leasing Realization: Management indicated that certain spaces are being re-leased at approximately 15% higher rentals than their earlier contracts. • New Commercial Completions: Company completed Brigade Square in Thiruvananthapuram and Arcadia at Brigade Cornerstone Utopia in Bengaluru during Q2. • Brigade Square: The approximately 1.85 lakh sq. ft. commercial property in Thiruvananthapuram was fully pre-leased at completion. • Commercial Development Pipeline: Approximately 6.8 million sq. ft. of commercial development is currently under construction. • Commercial Balance Capex: Management estimated approximately ₹3,350 Cr of remaining expenditure to complete the commercial development pipeline. • H2 FY27 Commercial Capex: Management expects to spend approximately ₹400 Cr on commercial projects during the remainder of FY27. • FY28 Commercial Capex: Management expects approximately ₹1,500 Cr of commercial development expenditure. • FY29 Commercial Capex: Management expects a further ₹1,400–1,500 Cr of commercial capex. • FY30 Commercial Completions: Management expects Brigade Industrial Park Block 1, Brigade Icon Commercial Tower and the WTC–Orion development in Hyderabad to become operational by FY30. • Brigade Industrial Park: The Block 1 project represents approximately 3 lakh sq. ft. of development. • Brigade Icon Commercial Tower: The project represents approximately 4.1 lakh sq. ft. of commercial space. • WTC & Orion Hyderabad: Management indicated approximately 17.2 lakh sq. ft. of commercial and retail development targeted for completion by FY30. • Commercial Asset Funding: Management expects to finance investment properties through a combination of internal cash generation and debt. • Commercial Tenant Demand: Management highlighted demand from GCCs, IT/ITES, BFSI, engineering, life sciences and flexible workspace operators. • Office Demand Outlook: Management expects occupier preference for high-quality, sustainable Grade A buildings to support leasing activity. • Retail Portfolio Occupancy: Orion Mall portfolio trading occupancy stood at approximately 94%. • Retail Sales Growth: Retailer sales across the mall portfolio increased approximately 16% YoY, supported by electronics, restaurants and other categories. • Retail Premiumization: Management is upgrading the lower-ground-floor tenant mix at Orion Gateway with bridge-to-luxury brands. • Facility Management Business: Aurea FM Services manages approximately 60 million sq. ft. of property. • Facility Management Revenue: Aurea generated approximately ₹71 Cr in quarterly revenue, with management indicating an EBITDA margin of around 30%. • Hospitality Outlook: Management expects continued growth in hotel earnings, supported by better room realizations, domestic travel demand and operating efficiencies. • Hospitality ARR: Average room rate increased approximately 11% YoY to ₹7,876. • Hospitality RevPAR: Revenue per available room increased approximately 10% YoY to ₹5,922. • Hospitality Occupancy: Hotel portfolio occupancy stood at approximately 75%. • Bengaluru Hotel Performance: Bengaluru hospitality assets recorded approximately 81% occupancy and 12% YoY RevPAR growth. • BHBL Profitability: Brigade Hotel Ventures PAT more than doubled YoY to approximately ₹22 Cr, supported by lower finance costs following IPO-related debt repayment. • Consolidated Debt Position: Gross debt stood at approximately ₹5,439 Cr as of September 2026. • Consolidated Net Debt: Net debt stood at approximately ₹2,765 Cr after adjusting for cash and cash equivalents. • Cash & Cash Equivalents: Company reported approximately ₹2,674 Cr of liquidity. • Average Borrowing Cost: Management indicated an average cost of debt of approximately 7.61%. • Debt Servicing: Approximately 85% of consolidated debt is supported by rental income and hospitality operating cash flows. • H2 Cash Flow Outlook: Management expects stronger collections from residential construction milestones, new launch payments and commercial property receipts. • Q2 Collection Timing: Management indicated that approximately ₹250–260 Cr of billed construction milestones remained to be collected following late-quarter invoicing. • Trade Receivables: Trade receivables increased by approximately ₹200 Cr, primarily reflecting milestone invoices raised toward September-end. • Construction Expenditure: Management indicated that certain construction payments were affected by accounting timing and reconciliation adjustments, rather than a change in underlying project execution. • Q2 Total Collections: Collections stood at ₹1,633 Cr, comprising ₹1,115 Cr from real estate, ₹343 Cr from leasing and ₹175 Cr from hospitality. • Q2 Operating Cash Flow: Net cash generated from operating activities stood at approximately ₹246 Cr. • Q2 Residential Presales: Net sales stood at approximately ₹1,827 Cr, up 72% QoQ, while sales volume increased 78% QoQ to 1.32 million sq. ft. • Q2 Presales YoY: Residential presales declined approximately 10% YoY, primarily reflecting differences in project launch timing. • Q2 Consolidated Revenue: Revenue stood at ₹1,250 Cr. • Q2 Consolidated EBITDA: EBITDA stood at approximately ₹478 Cr. • Q2 Consolidated EBITDA Margin: Margin improved to approximately 38% from 26% YoY, an expansion of 1,200 bps. • Q2 Real Estate Revenue: Segment revenue stood at approximately ₹760 Cr. • Q2 Real Estate EBITDA: EBITDA increased approximately 62% YoY to ₹178 Cr. • Q2 Real Estate EBITDA Margin: Margin improved to approximately 24% from 12% YoY. • Q2 Leasing Revenue: Segment revenue stood at ₹329 Cr, broadly flat QoQ and down 3% YoY due to a one-time gain in the previous-year quarter. • Q2 Leasing Adjusted Growth: Excluding the approximately ₹26 Cr prior-year finance lease income, leasing revenue increased around 4% YoY. • Q2 Leasing EBITDA: Leasing and facility management EBITDA stood at approximately ₹242 Cr, with a reported margin of 73%. • Q2 Hospitality Revenue: Segment revenue stood at ₹161 Cr. • Q2 Hospitality EBITDA: Segment EBITDA increased approximately 41% to ₹59 Cr, with margin at 37%. • Q2 Consolidated Net Profit: PAT increased approximately 29% YoY to ₹219 Cr. • Q2 Profit After Minority Interest: PAT attributable after minority interest stood at approximately ₹194 Cr. • Key Challenges: Timely approvals for H2 residential launches, conversion of sales into cash collections, premium housing absorption in Hyderabad, commercial leasing execution, elevated capex commitments, land payments and project completion timelines remain important factors.
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