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Brigade Enterprises Ltd
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Ladies and gentlemen, good day, and welcome to the Q1 FY '21 Earnings Conference Call of Brigade Enterprises Limited. As a reminder, all participant lines will be on a listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. M. R. Jaishankar, Executive Chairman of the company. Thank you, and over to you, sir.
Thank you, Aman. Good afternoon, ladies and gentlemen. Welcome to the Brigade Enterprises Q1 Financial Year '24 Earnings Call. I'm joined by our Managing Director, Ms. Pavitra Shankar, Joint Managing Director; Ms. Nirupa Shankar, our Executive Directors, Mr. Roshin Mathew, Mr. Amar Mysore and Mr. Pradyumna Krishna Kumar; and senior management team, Mr. Atul Goyal, CFO; Mr. Om Prakash, Company Secretary and others. I'm happy to share some of the highlights of the group. As a validation of our consistent performance and good governance, our credit rating was upgraded recently by resin from CRISIL to AA stable in early August. We are now rated A minus stable by both ICRA and CRISIL. Last week, Brigade won the bid for a 9.7-acre plan purpose in the premium area of [indiscernible]. This is the largest plot in the Phase II auction with the MDA. The total transaction size is INR 660 crores, valued at around INR 68 crores an acre with a development potential of about 3.4 million square feet. The transaction underscores our commitment to [ Idrabatas ] a growing market for Brigade. For that matter, in the last 1 year, we are totally signed about 23 million square feet of developable space in different cities. Sustainability and social responsibility are among our core values of Brigade. We have announced our ESG strategy this year. In this year's sustainability report, in which we have committed to 11 new ESG policies. We have initiated the GRESB rating and process and more importantly, has set an ambitious target to become net 0 by 2045, among others. The first quarter in the new financial year has seen consistent performance across all business verticals in terms of growth and cash flow. However, the reporting impact of the Ind AS115 standard has resulted in a drop in Q1 revenue, which is based on the value of registration sun and units handed over to customers. There have been peaking issues with the new state government registration software called [indiscernible] which is creating quite a bit of issues at the subregister Southeastern for the registering authorities in Karnataka. This led to a delay in registration registration is expected for the quarter 1. This matter should resolve itself in the coming quarters, resulting in improved revenue and margins. During this financial year, our team is geared up to hand over about 4,500 residential units, with an area of approximately 5 million square feet valued over INR 3,000 crores. Multiple cases of Brigade Cornerstone Utopia, Brigade El Dorado, Brigade Citadel and Brigade Orchards are in the handover stage. Turning to the residential segment. The segment continued its consistent performance with new sales of 1.46 million square feet, valued at about INR 996 crores in Q1. There has been a steady increase in pricing realization, which now stands at over INR 6,800 per square foot compared to INR 6,200 last quarter. Excellent sales supported the steady construction progress has led to a strong collection of INR 83 growth, which has led to 0 debt in the residential segment as of Q1. Similar to the overall industry, inventory overhang has reduced in our portfolio due to good customer demand. Industry-wide, the results has also been fewer launches in Bangalore, Chennai and Hyderabad when compared to cities like early Mumbai and Pune. We have planned 7.87 million square feet of residential launches in the next 3 to 4 quarters. However, these are highly dependent on timely approval. In Karnataka, the change in state government has led to delays in process across the board for new product launches as well as issue of completion certificates or what we call as of to '23. We are hopeful that the issue will get resolved in the coming quarters to maintain our launch timeline. The demand on ground for the residential sector stayed strong, which we witnessed at our recently concluded flagship event, Brigade showcase, which is being conducted consistently for the past 16 years. It resulted in excellent footfall and inquiries. As regards to the office segment, [indiscernible] has continued to focus on return to office with office parks having an improved occupancy range of 50% to 75%. Brigade leased 61,000 square feet this quarter. Leasing was muted due to the availability of only SCV office area in our portfolio. Existing tenants took up additional space and this trend is likely to continue. However, despite the relatively slow quarter, there has been an increased momentum in leasing inquiries in Q2 FY '24, even for SEC spaces. Brigade has an active pipeline for its remaining completed assets. With the transactions closed in quarter 1 financial year '24, Brigade has achieved a leasing of 84% of its available inventory with 100% leasing under the non-ACZ category. In line with the market trends, 85% of the transactions for the quarter were a small and medium price, which is less than 50,000 square feet. Leasing segment saw a 22% year-on-year increase in the quarterly leasing revenue from INR 175 crores to INR 213 crores. Q1 financial year '24 with a stable office rent collection at 99%. Coming to Retail segment. During Q1 FY '24, there was a 12% like-for-like growth of retail sales consumption in comparison to Q1 FY '23 across the mall retail SBU. Retail categories like electronics, eyewear, jewelry, watches, beauty and cosmetics, travel gear were the top performers in terms of their trading density. All these categories grew at an average of more than 25% for Q1 '23, even though the multiplex segment, these grew by 37% compared to financial year '23 due to lower movie content. Overall, as retail SBU, all our malls are leased at a combined total of 91% with our flagship mall Orion Mall Brigade Gateway is at 99% currently. We are expected to close 45,000 square feet of new brands that are under [ fetal ] to commence operations by Q3 FY '24 across our retail. As regards hospitality business, it has continued continuing its growth story in quarter 1 financial year '24 as well. There has been an all-round improvement in our numbers, with both our top line and bottom line reduction higher than Q1 FY '23 numbers. Our revenues increased by 1%, ARR has gone up by 16% and AGP is up by 7% and compared to quarter 1 of financial year '23. Our occupancy showed a marginal drop by 5%, but this should improve in the coming quarter. The F&B segment has seen an encouraging growth due to banquet events, both corporate and social gatherings. A number of domestic air passengers in India has been steadily surpassing the pre-COVID levels. In May 23, domestic air travel increased by 15% year-on-year. It is for the first time since December 2019. That brings me to the end of our operational highlights. Atul Goel, our CFO, will now take you through the financial highlights. Thank you.
Thank you, sir. Good afternoon. On behalf of the company, we welcome you to the earnings call of Q1 FY 2024. Chairman has already shared the operation. I'll be sharing some key financial areas for the quarter. As informed by him, our rating has been upgraded to AA minus stable from plus position in order. Of course, [indiscernible] already upgraded us in the first quarter. Leasing and hospitality business has been doing well and achieved PBT of INR 19 crores and INR 11 crores, respectively, during the quarter. Good sales and collection in Residential segment has helped us achieve 0 debt in residential segment. To start with company's financial updates for Q1 FY '24, all of verticals of the company continued steady performance in Q1 FY '24. The real state segment got a turnover of INR 371 crores, whereas the same for Q1 FY '23 stood at INR 655 crores. There is a decline in real estate revenue and PBT, which is mainly due to less registrations as emulated by the Chairman in his speech and no project roses. However, if you see our gross profit for real estate is at 27%, which is in line with the previous quarter. So gross profit, we have maintained it some because of the lower revenue that we are looking at a lower PBT in the real estate segment. The leasing segment closed the turnover of INR 213 crores, wherever the same for Q1 FY '23 stood at INR 175 crores. EBITDA stood at INR 160 crores, which is 75% of the losing revenue. The hospitality segment progged a turnover of INR 102 crores, an increase of 13% from same quarter last financial with an EBITDA of INR 38 crores. EBITDA margin stood at 38% in Q1 FY '24. The consolidated revenue for Q1 FY '24 stood at INR 685 crores as against INR 920 crores in Q1 FY '23 with an EBITDA of INR 206 crores. EBITDA margins stood at 30%. Consolidated pet after managing interest for Q1 FY '24 in INR 39 crores. Total collection in Q1 stood at INR 1,244 crores as compared to INR 1,210 crores in Q1 FY '23. Cash flow from operating activities stood at INR 267 crores during Q1 FY '24. Coming to the debt and equity for liquidity position, we continue to have adequate liquidity and undrawn credit lines from the financial institutions. Our average cost of debt has been contained at 8.72% increase of 107 bps, though Report has increased by 50 bps. Gross debt of the entity stood at INR 373 crores, and this has been reducing very consistently. The cash and cash equivalent was INR 171 crores as on 30 June 23. Going to country, the company's net debt outstanding is INR 2,012 crores, out of which BL share is INR 1,374 crores, almost 76% of our debt pertains to the commercial portion, which is by the rental income. Debt equity ratio stood at 0.52% as of June '23. I will now hand it back to the moderator for questions.
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Adhidev Chattopadhyay from ICICI Securities.
I got a question. The first thinking for our new land acquisition. I think Mr. [indiscernible] allocated the seller would be in excess of 3 million square feet. Help us understand the utilization over there and what would be the indicative GDV for this project, which you will add. And secondly, the land [indiscernible] I think, is almost INR 700 crores of the standby. So will it all be paid out this year? Or is it the [indiscernible]? That is the first question.
This is M.R. here. So like Chantal, it is about INR 650 crores is the land value. But with the same duty registration, it will go up to 700. The installment is already getting to next week, which is about INR 200 crores, which we are getting ready to pay. The whole thing needs to be paid in 90 days. So that's what we're aiming for. In terms of potential, it is about, say, 3.5 million square feet. And FSI in Hyderabad, everybody is looking at unlimited, as I said, but we will look at close to, say, 8% around that. And we're just getting started with the master plan. So probably next call we'll have more updates too.
Okay. But if you could just help us understand the current residential rates or whatever you are planning over there, the indicative GDV based on the rates over there?
So I'll let Pavitra answer that because she knows about residential [ closing ].
Yes. Hard to say what we will launch at, et cetera, but we do know the existing projects in the area was selling around 5,889. But as soon as our transaction was announced, I think the rates already [indiscernible] for residential there. That said, we're not committing yet on what the plans are, is under design stage right now.
Okay. And just to clarify, so if the entire land payment of INR 700 crores will go in the next few months. Lastly, also another outstanding payment of INR 700 crores, which is in there as of March. So just to understand correctly, the entire INR 1,300 crores will be paid out this year.
No, it depends upon the land closure, definitely INR 700 crores will definitely be paid in [ 919 ] some other lands which are going to get growth, but I don't think of INR 721 crores will get spent during this year. It will take time as and when land period happens.
Okay. But we will not be taking on any additional debt, mainly financed through our cash but INR 1,700 crore plus of cash which we have.
We are planning not to take any debt to see as the 3 progress.
The next question is from the line of Parikshit Kandpal from HDFC Securities.
Congrats on a decent quarter. So just on the Hyderabad and [ Kokapet ]. So besides the land outgo of almost INR 700 crores. So are there any other premium payments involved in Handrabad? Or is this the total cost including the premiums and all?
It is the total cost. There is no further premium payment other than approval costs.
Okay. Because if I do the math, actually not make -- are you in a INR 10,000 of spare fees you will not take more than 25% EBITDA on this is on cost, even if the construction cost because I think this is high-level at almost INR 5,000 maybe the construction cost itself is about INR 1,700 and then SGN will be another 200. So is it right to assume that this project will have maybe 25% EBITDA margins in line with our existing margin?
We expect it to be driven to 30% EBITDA margin.
Close to 30% expected to
Yes, I do.
You said about 30%, you said?
Yes, between 25% to 30% is what it is.
Okay. For sure. Sir, my second question is on frankly, the realization. So just wanted to give you more granularity on the realization, especially in the Bangalore market. So we are seeing some of the other peers or launching projects close to about INR 10,000 a square feet average utilization. And our realization on the portfolio is still at much lower levels, but I think it to INR 6,800 this quarter. So are the new launches which are planned. So what realization we are targeting or what segments on a realization basis, these projects will be done, especially in Bangalore?
See, we have a combination in some of the new launches ours will also be in the range of 10,00 some maybe at 8,500, 9,000. Some will be at 6,000 which are a little bit in the affordable housing category. So it is average, I cannot say it will be 10,000. Average will be definitely upwards of 8,000 -- it will be [ part adult ] is going up.
Okay. And just the last question, sir, on BTG and WTC. So I mean you did talk back of physical occupancy are now touching closer to maybe 50% to 75%. But for these 2 assets within the campus to what physical occupancy started hitting now after the return to asset movement?
The occupancy is also between 65% to 75%. In fact, Chennai is showing better occupancy and return-to-office numbers. [ Namdhari ] is around 65% and the Chennai project has announced 75%.
[ Namdhari ] is around 65% and the Chennai project is around 75%?
Yes.
The next question is from the line of Karan Khanna from Ambit Capital.
So firstly, by appreciating that historically, the first quarter is usually the softest quarter for the company. But we know this is that first quarter to be in accounts for 80% to 30% of your full-year pre sales number. So is it safe to assume that this trend will continue for rest of FY '24 as well? Or because the launches will be piled up towards the latter half of the year, we believe that the full-year number will possibly be higher.
Karan, yes. So we've also communicated earlier that our launches will be towards second half of the year. Despite that, I think Q1 has been pretty strong. So depending on the launches and as we mentioned earlier also, assuming that there's no delay in approval, we should certainly see good numbers this year. I think the demand picture is very strong. It's a question of getting the launches out. So I don't see any issue with meeting the numbers if we have that.
Sure. Just as a follow-up, how should we think about the launch pipeline of 7.8 million square feet because in June last year, you spoke about our rolling 4-quarter launch pipeline of 7.6 million square feet? But if I look at the actual launches over the last quarters, this has totaled to only 4.95 million square feet. So just curious to understand if the 7.87 million square drilling-related pipeline, which you have suggested in your presentation on Slide #28. Is there any risk to that number?
[Audio Gap] Chennai, some of the projects that we thought would come into FY '24 -- or the 3-year rolling for quarters are now in the next season. Also, we had expected to have a couple of launches in Q1, which just basically missed the end of the quarter. So all that will be included in the next 4 quarters.
Secondly, on your hospitality portfolio, while acknowledging that 2Q is usually the seasonally weakest quarter. With the cricket on cap around the corner, are you seeing encouraging trends in terms of the inquiries resulting from this given Bangalore is also hosting fee of the matches in October and November? And as a follow-up, how are you seeing the trends on share of FDA in your hotels?
Yes, the Q1 for this year was quite good compared to Q1 of last year. So you'll see improvement on pretty much all parameters apart from occupancy. The next quarter is going to be fairly good at [ it ]. July was a little slow, but August and September should be good months. And as for the third quarter and fourth quarter, you see the installment of hospitality. So the momentum is good. And I think we mentioned earlier a traffic number to the momentum is very good even in terms of food and beverage and room as well.
And in terms of the share of FDA, is that increasing in the portfolio?
[ Foreign tourists ]?
That's right, foreign tourists.
On foreign tours, not as high as is what impacted titration of what it was pre-COVID. So I would say still maybe 25% of what it was pre-COVID. But I think the demand is coming mostly from the domestic segment.
Sure. And lastly, a bookkeeping question. I just wanted to understand if I'm looking at Slide #8, you started reporting the presales number, including the land owner share. So is that going to be the trend going forward as well? Or how are you going to report the sales number?
Yes. That's going to be the trend going forward. We actually looked at what our other peers are also doing in the market. Previously, we were not adding the area share. So that's what we started to do. That said, it doesn't impact any of the cash flow picture that we've been sharing in the past, whatever on Slide 10. All of that continues to stay the same. So there's no material effect.
The next question is from the line of Pritesh Sheth from Motilal Oswal.
First question is just trying to understand your business development strategy from here on, specifically in the markets like Chennai and Hyderabad. So Hyderabad, we have one large project now and another 1 million square feet, which you are already in conversation. So that should have another roughly around INR 4,000 cores, INR 5,000 crores of revenue potential from that market? And Chennai, also, we already tied up a lot of plans. So would that be it for near term in terms of Chennai and Hyderabad's new acquisition plans and focus would be on churning our inventory in Bangalore? Or how should we think about it?
See, we have signed quite in Chennai and recently, Hyderabad, it does not mean we are not looking at opportunities. But instead of buying more, we have bought quite a bit in Chennai and now with this major acquisition in Hyderabad. We may move towards a bit more of a joint development projects. I think both markets along with [indiscernible] sufficient opportunities. So we will continue to look for and our intention is to do better and better in the overall sales volume from our 6.35 million square feet currently. We would like to reach 10 million square feet as early as positive. [indiscernible]
Sure. And out of the 10 million square feet, roughly 40% would come from Chennai and Hyderabad.
Probably, yes, no more or less. I think the intention is to even aim higher as possible, about 50% between those 2 markets and about 50% from bankers but there is no -- I would say we have done this much and no further – not that approach is not there. We will evaluate continuously the opportunities and the market conditions and the areas in which we operate and in the segments we operate and then take account.
Sure. So for that 50%, 2.5 million square feet contribution from each of the market, so definitely then we'll have to look at more projects to be added in both the markets. Is this the right understanding?
Yes. Correct.
Got it. And secondly, on launches, sir, Chennai, the Q4 launch plan remains intact or there has been some delay on it? Any clarity we have right now?
So, the Q4 launch plan is the same. We are hoping to meet those deadlines. It should come into Q4.
Great. And lastly, [indiscernible] is that we launched this quarter, and I think it's also delivered. So we'll be looking to sell it outright, right?
No, it is not yet delivered. It is getting completed. It should get completed in, I think, quarter 3. Q3 should get completed. So some negotiations are leasing is on. So we are open to retail. We are open to sell. So I think there is no definite decision that it should be only sold and it should be reached. So we are flexible. Depending on the situation, we are selected.
Got it. That's helpful. And just lastly, if you can provide the breakup of collections between the segments for the quarter?
Yes, sure. Those residential, it is INR 36 crores. Commercial sale is INR 43 crores. Commercial deals is INR 149 crores. Retail is INR 52 crores. Hospitality is INR 125 crores and PMS maintenance services is around INR 40 crores. Overall, INR 1,245 crores.
The next question is from the line of Rakesh Wadhwani from Monarch AIF.
Sir, one of national [indiscernible] given the terms of volume growth for the multi-tent business. So how do you expect from [indiscernible] coming down this half?
Excuse me, your voice is not clear.
Am I audible, sir?
Sir, your voice is a little bit muffled. Can I request you use handset?
Sure. Is it clear? Is it better?
Yes. Go ahead, please.
Sorry for [ that ]. So in the last call, we had given the guidance that we are expecting a double basis or high-teen volume growth in the residence business. And so sir, wanted know what will be the growth drivers related to the new launches that one or for the existing inventory. So how do you expect the growth in that?
Yes. So generally, while we don't give guidance year-on-year, we have already targeted like you said, a double-digit growth for the residential portfolio last [indiscernible] 36% increase. Our launches for this year, what is driving the sales expectation for this year so a lot bit of dependence on the new launches coming, which we had indicated earlier would be in the second half of the year. So provided that happens, I think we'll see pretty strong growth in our residential sales this year. So we're still confident of the market conditions and so on. It's a matter of getting approvals and being able to launch.
Okay. And second question on the EBITDA margin for the Residential segment. If you look at the EBITDA margin for the Residential segment. So before FY '20, we were doing an EBITDA margin of 23% to 24% to 25%. But after 2020, after COVID has calmed down so just wonder now what is the sustainable EBITDA margin for the residential business because all the things in for [indiscernible] coming down are generalizing also and the scale has also gone up before COVID like which was even now scale has become double.
Yes. Thank you. We are accounting on AS115, and revenue depends upon the recognition of the registration of the properties. So because of the variation in the revenue EBITDA margins have been wearing because you have to absorb your fixed cost for the company as well. So if you see – let's talk on gross profit, you can see it from 25% from last quarter. Profit for real estate has been in the range of 25% to 30%. But that we have maintained. It's only that because of the variation in the revenues because we are going on a completed matter, this variation is coming.
So sir, can you say 23% to 24% on a sustainable EBITDA margin for residents?
Yes.
Okay. And one last question. Can you please talk about the GDV, the gross development value of the sellable on you for the project that has gone to be launched in the next 4 quarters, that's 7.8 million. What is the sales value potential sale for this?
Yes. So just to that. So we've communicated about 7.89 million square feet of residential launches this year. The GDP of that should be around INR 6,700 crores. The shares that would be around INR 4,400 crores. And that's again dependent on the launches happening on time.
Okay. The share of [indiscernible] INR 2,400 crores.
I'm sorry?
[indiscernible]
[indiscernible] is a related share.
INR 4,500 crores.
The next question is from the line of Parvez Qazi from Nuvama Group.
So my first question is to Pavitra. Just regarding the recent Hyderabad land that we won in the auction. So I believe in the same new polish layout, the government had conducted an auction 2 years back also. I guess the average land prices given that up or somewhere close about INR 40-odd crores. If you look at the current auction, average land prices have moved up to INR 273 crores per acre. Now I understand the land lost might not be strictly comparable. But I mean, this price appreciation in terms of land value, doesn't it make you slightly apprehensive towards what is happening in the Hyderabad real estate market?
Pradyumna will answer that.
Yes. See, we also examined the Phase I part of the Neopolis auction back in October 2021. Back then, we were not convinced and see there's more like the infrastructure is not in place. Now we see the infrastructure in place and then the current rate, the way the selling prices that are going on, we are convinced that the price that we acquired is less than the average INR 73 crores per [ acre ]. We acquired it at INR 68 crores per [ acre ]. So we are in good stead and the numbers add up for us.
Okay. My second question is about the retail business. Obviously, consumption has picked up across the board. We also seem to be doing quite well. So for the future, do we have any plans to develop new malls or space? If yes, whether we are okay with developing stand-alone malls or we want to do it as part of an integrated project only?
It is a combination for us. So for instance, in this Hyderabad project that we plan to do, we might look at some retail and generally, in mix development, we will look at some amount of retail. We have Brigade Utopia coming up. So there is some amount of retail there. We have Brigade Valencia, we are looking at some amount of retail there. So I think if you look at the stand-alone that can be developed in a particular city, just limited to micro market. So what we see in the future is also creating more neighborhood in malls and adding retail more and the social infrastructure to the larger projects mix developments that we have. If the opportunity is a success, then we are open to a stand-alone [indiscernible].
And lastly, some late question for Atul, sir. What would have been the geographical split of sales this quarter? And second, what was the contribution from TV and WPC rentals this quarter?
So first question, [indiscernible] from BTG, the rental was INR 40 crores for Q1. And for [indiscernible] was INR 31 crores.
For Residential sales, 88% came from Bangalore, 10% from China and the rest from [indiscernible].
The next question is from the line of [ Mitra Dama ] from [ Affix ].
So on the debt, do you intend to keep the debt in retention segment and its level of 0 debt or very low level of that? Is it our long-term plan?
The long-term plan is difficult. But yes, we always never that our debt should be minimum and we have been always been conservative on the debt. Residential cycle is very good, and our projects are stemming, of course, till cycle is going on, we are able to sell – we don't intend to take any debt on the residential plant.
Okay. That's good. And second thing, sir, just I don't know whether [indiscernible], the EBITDA margin that you have been given in the segment in the second...
Your voice is not very clear. Please [indiscernible] the mic.
Yes, I'm using the handset. I hope this is okay. So basically, the EBITDA margin in the residential segment is showing 6%. And in the last 5 quarters, it has been low into 13% range. So sir, just wondering when do we expect to see the margin of 20%, 25% around in 23%, 25%, that is on…
See, I'll again clarify the revenues are based on AS115. So when registration has happened, you are reconvening the revenue. This is an important parameter is that your gross profit is maintained. And I would like to -- if you can compare for last 7, 8 or maybe 3, 4 years, we have maintained our gross profit margin of 25% to 30% all way. So it's all based on the revenue. If you go on to use, it will look much much better. So this does not help because this is a lot of land and basically completed contract revenue. So as and when we restate registrations are going up, going to happen and agent-project closures are going to happen. This variation will always be done.
I just want to add to that, some of the projects coming up for an open and completion with the higher margin projects, we launched them in FY '18/'19. So as we come, you will see an improvement in the market.
Okay. Got it. And one final question. Besides the land percent for Hyderabad that you had -- how much more land payments are pending? How much more pending payment for when today?
The land payment right now pending is around INR 721 crores besides INR 620 crores or INR 700 crores, which we have to pay, but overall is around INR 1,400 crores. And that will be paid over the next 1, 2 years, [indiscernible]. So yes, it depends. See, ran will be pretty definitely. Out of this, maybe 50% to 70% or 60% repaid this year. Otherwise, it will go to the next year. So it's a rolling cycle. As and when land gets clear, all due diligence happen when we say it's a rolling cycle, so you cannot say that we'll pay everything in this year.
The next question is from the line of Akul Broachwala from Ocean Dial. It seems we have lost the line from Akul. We move to the next question that is from the line of Ritika Agarwal from Value Quest.
My question is for Atul. So FY '23 INR 410 crores.
I can't hear you. You are not clear.
Is it enough?
Much better.
Yes. So my question is sales for FY '23, which is INR 4,100 crores. I wanted to clarify if this is entirely Brigade share of sales, is there some JV share revenue share, which is included in this number?
So last year, we did not include the landowner area share. So that is a change that has happened only to this quarter. So the numbers we shared last year were not in [ change ].
Okay. till FY '23, you were not including landowners or revenue JV share was not included in the sales number, while from FY '24, that will be grossed up and shown our sales value, would that understanding be correct?
So I would say that in terms of operational numbers, such as sales and booking value, we were not including the landowner area share. However, the landowner revenue share was intended. What we've done this time is correct that so that we are sharing we are declaring a 100% sales booking values as well as area. But as I clarified earlier, in terms of our cash flows, there is no change. We've always communicated only the net it share FY '23 and before or whether it is Q1 and going forward.
Got that, ma'am. So yes, in FY '23, this INR 4,100 would have included revenue share, as you mentioned. So what would be a revenue share? And what would be Brigade core sales?
Regain is typically 85% across the board. If you [indiscernible] positive footprint, there are some lines which we own that are decent percentages that are on the JV projects. So across the board last year, you could have said around 80%, 85%.
Got it. And this quarter, particularly what would be Brigade's core share as this quarter, I believe, would include revenue share plus the area share that we started putting that?
I think 80%
The next question is from the line of Adhidev Chattopadhyay from ICICI Securities.
The question at Hyderabad. So where is the earliest to the launch of this project? And obviously, I don't think insulating your launch pipeline, so [indiscernible]
[indiscernible]process is the high-value property, et cetera. We will have it launch as [ even ]. But it is due to, I would say, environmental clearances and others, it is safe to say it can take 10 to 12 months.
Okay. So sometime in second half of next year is a reasonable assumption?
[indiscernible] around extra figures.
Okay. The second question is on the leasing obviously now with the S issue process. So I think earlier, we had a leading target by March '24 to lease the entire thing now. So where are we on that guidance and visit because you have mentioned you have a strong pipeline now all for that [ space ]. So would you help us to understand that is it a safe assumption to assume 100% occupancy by in another 9 months?
See, the target and efforts remains the same. Definitely, we want to lease 100% within FY '24. Sometimes things are not toughly within our control. But the team is making all those efforts to certainly lease as of...
Okay. So but anything on… Yes. So but convert, we should get to 90% to what the sense at the overall portfolio level at from 84%. Sorry, sir?
Yes, it should happen.
Okay. And sir, just another last question. Sorry again, I'm going to ask on Hyderabad. So see, many developers have now bought land in the auction. So how have you assessed the demand-supply in that market because they have other developers also trying to make use of the unlimited FSI, right? And how would you ensure that other developers around to launch at a lower price? And it seems like 10 to 11, I don't know. So what is your thoughts about that?
Yes. See, currently, I may not be able to scan out or I would not like to spell out everything. But we are confident we'll come out with the winning strategy. [indiscernible] Not to do it. I think we will come do it.
The next question is from the line of Akul Broachwala from Ocean Dial Asset Management.
On the delay in recognition of revenue because of NDS, I just wanted to have some clarification, what would be the extent of inventory that is ready to be delivered or got delayed because of this issue? Can you just quantify that in terms of area or else in terms of value?
Yes, it should be in the range of 3 million to 4 million, where completion may happen and we would recognize it slowly.
Yes. We had said around the plan that we would reclass 4,000 tonnes this year. But we also indicated that a lot of that is dependent on coming in time for the occupancy certificate and completions and also the system settling down, but so far, it's been improving. So hopefully, we should be able to meet that.
Okay. Fair point. And secondly, in terms of our leasing portfolio, so has there been any significant escalations towards the existing tenants this quarter? Or is it purely because of the new leasing that we have done has led to sequential increase in revenues? So just wanted to understand the factors attributing to sequential increase.
The reasons are going out for the contract, we we have a standard increase in the rental. It could be 5% per annum or 15% every 3 years and going after that is a sequential increase. And yes, in some cases, pioneered...
Understood. And lastly, you mentioned in the annual report that you are also looking towards warehousing data center and other avenues. So any near-term capital allocation plans that you're looking at? Or will this be a medium-term strategy going forward?
So we have a 3-acre plot that we are looking to explore our data center. Some of the plans are being done up. So we'll have an update soon. It will be a little speculative, so it's more like trying to do a buildout. So maybe once we have more clarity with it.
Okay. And this will be around Bangalore only? Or is it some other cities?
[indiscernible]
Ladies and gentlemen, that would be our last question for today. I now hand the conference over to Ms. Pavitra Shankar, Managing Director, for closing comments. Thank you, and over to you, ma'am.
Good afternoon. Before we close, we would like to share a few of the highlights. Brigade Enterprises Limited and Optimal Services Limited have been recognized among 3 to 100 bps inside companies to work on 2023 in the great place to work banking. This is probably conducted by economic sand and the globally renowned Prepay Institute. We are now celebrating 13 years of being [indiscernible]. In the latest release of a brand report from [indiscernible] as the second best brand among all rest developers in the country. And next is a yearly report that [indiscernible] plans on trust, return on investment, quality, reputation, bio endorsements and brand recall. The Brigade Foundation celebrates its 20th anniversary this year, and we're very proud of the impact from our lot-for-profit initiatives over the past 2 decades. We reiterate our commitment to make a difference in the communities in which we operate. The [ Indian expels medium ] supported by real has been voted #1 in the list of things to do and in the TripAdvisor People's Choice category. We encourage all ways listening to plan a trip to [ responder ] place the next time you're in our cities. Some of the accolades and recognitions we received in the last quarter are Brigade Tech Gardens Bangalore to set an award for the best commercial highlights development at the Asia Pacific Property Awards '23 '24. [indiscernible] was honored with the title of the most admired shopping center of SERO 2023 Metro South at [ MAPIC ] 2023. WTC Chennai on net commercial Project of the Year at the FICCI-REISA Award 2023. That is for our earnings call. Thank you. Thank you very much.
Ladies and gentlemen, on behalf of Brigade Enterprises Limited, that concludes today's call. Thank you all for joining us, and you may now disconnect your lines. Thank you.