Brigade Enterprises Ltd (BRIGADE) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to Brigade Enterprises Limited's Q2 FY '27 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Pavitra Shankar, Managing Director. Thank you, and over to you, Ms. Shankar.
Pavitra Shankar (Brigade Enterprises Ltd): Thank you. Good afternoon, everyone, and thanks for joining us for Brigade Enterprises'
Pavitra Shankar (Brigade Enterprises Ltd): Q2 FY27 earnings call. I'm joined by our Joint Managing Director, Ms. Nirupa Shankar, and our executive directors, Mr. Amar Mysore and Mr. Pradyumna Krishna Kumar, and our CFO, Mr. Yogesh Patel. We will jump right in. In real estate, we launched 2.4 million sq ft of residential projects in Q2, at an estimated GDV of approximately 3,000 crores. Brigade Barcelona at Neopolis in Hyderabad had a good customer response with launch quarter sales of 475 crores. Brigade Misty Greens in Mysuru was a launch that slipped into Q2. Yet, we have almost completely sold the available inventory. A small, senior-friendly project, Azalea Brigade Meadows in Bengaluru, rounded out the quarter's launches. Net sales for the quarter were 1,827 crores on a volume of 1.32 million sq ft, 72% and 78% higher than Q1 value and area respectively. While presales were 10% lower than Q2 FY26, this is mostly reflective of the launch timing this year and not of the demand on ground. Average realization stood at ₹13,841 per sq ft, a strong 29% year-on-year improvement driven by disciplined pricing increases in our existing projects and a sustained shift in contribution of higher-end homes in our overall product mix. While the RBI raised repo rate by 25 bps after a long period of stable rates, this has not impacted customer sentiment on ground as the share in home loans continues to hold steady. 2/3 of residential volume in the quarter came from sustenance sales in our ongoing projects with the balance from new launches. We have 9,800 crores of inventory in addition to another 7 million sq ft or 7,600 crores GDV of launches planned for the second half of the financial year. In Q3, we aim to launch two of our large township projects in Bengaluru, which both have significant contributions to the H2 sales achievement. For now, we reiterate the 9,000 crores presales guidance. Our commercial office portfolio continued to grow steadily. During Q2, we added 0.27 million sq ft of our operational to our operation leasing portfolio with the completion of Brigade Square in Trivandrum, an 8 a 185,000 sq ft project that's 100% pre-leased. We also completed Arcadia at Brigade Cornerstone Utopia in Bengaluru, taking our total operational leasing area to 9.6 million sq ft at a portfolio occupancy of 90%. This quarter, we transacted close to 6 lakh sq ft of commercial space, approximately 1 lakh sq ft in sales, 1.5 lakh sq ft in new leasing, sq ft in turned space and 1.34 lakh sq ft of investor space. Rental collections remain robust at 99%, and office-only lease revenues stood at 201 crores, 8% higher year-on-year. Our occupier base remains well diversified across GCCs, IT, ITES, BFSI, engineering, life sciences and flexible workspace operators. Occupier demand continues to dif- to reflect flight-to-quality with GCCs accounting for- for 41% of Q2 office leasing and green certified tech parks capturing 61% of market absorption. In line with this, three of our assets, WTC Annexe, Brigade Twin Towers and Brigade Deccan Heights, received IGBC Gold certification during the quarter. Lease-up of WTC Bengaluru and Brigade Twin Towers for the coming quarters and both projects have a healthy pipeline. Beyond our operating portfolio, we have 6.8 million sq ft of commercial development under construction, including the World Trade Center and Orion Mall in Hyderabad, with a balanced capital expenditure of approximately 3,350 crores to complete this pipeline. We will continue to phase new supply in line with occupier demand. Turning to retail, our Orion Mall portfolio delivered a steady quarter at 94% trading occupancy. Retailer sales across the portfolio grew 16% year-on-year, led by stronger electronics and restaurant sales, while mall footfalls remained steady, supported by new store openings, festive activations, promotional events and major movie releases. We're also premiumizing the lower ground floor at Orion Gateway
Pavitra Shankar (Brigade Enterprises Ltd): 16 million square feet with a revenue of 70, 71 crores and EBITDA of 30% in this quarter. In hospitality, BHBL delivered a strong Q2. Portfolio ARR grew 11% year-on-year to INR 78, 7,876 crores and sorry the to 7,876 rupees and RevPAR grew 10% year-on-year to 5,922 at an occupancy of 75%. Bengaluru remained the key growth market with occupancy of 81% and RevPAR growth of 12%. BHBL's PAT more than doubled to 22 crores from a year ago, aided by lower finance costs following the post-IBO IPO debt repayment and improved operating performance. Growth has been rate-led with resilient domestic demand. Q2 was also a strong quarter for our ESG on both performance and recognition. We achieved a GRESB rating real estate ESG score of 93.7 with a four-star rating for FY '26, reflecting our steady progress towards sustainability goals. Brigade Citrine received the IGBC Net Zero Carbon design certification with 76 credit points, extending our net zero approach from individual landmark projects to how we design the wider portfolio. Q2 marked the return of our launch cycle with sales, launches, and development potential, all moving in the right direction. Our priorities for the second half are clear, deliver our planned launches on time, convert sales into collections, and continue to grow our annuity portfolio. With that, I will now hand over the call to our CFO, Mr. Yogesh Patel, to take you through the financial performance for the quarter in detail.
Yogesh Patel (Brigade Enterprises Ltd): Thank you, Pavitra. Greetings and good afternoon to all. To start with, a quick summary of key reported financial numbers for Q2 FY '27. Consolidated revenue for the quarter stood at 1,250 crores with EBITDA of 478 crores. The EBITDA margin improved to 38% compared with 26% in Q2 of FY '26, an improvement of 1,200 basis points. This improvement builds further upon our performance of Q1 FY '27, and is primarily contributed by higher margins in the real estate segment. Detailing the segment-wise performance in the quarter, the real estate segment reported a revenue of Rs. 760 crores and an EBITDA 178 crores, with EBITDA increasing by 62% as compared to Q2 of FY '26. The EBITDA margins grew 2x year-on-year to 24% versus 12% in Q2 FY '26. The leasing segment revenue of Rs. 329 crores was consistent with the previous quarter of this year, while on a year-on-year basis, it decreases by 3%. It is pertinent to note that Q2 FY '26 included a one-time income of around Rs. 26 crores related to finance lease transaction. Excluding this, the revenue for Q Q2 FY '27 would be higher by 4% year-on-year. EBITDA for leasing segment, including facility management, stood at Rs. 242 crores and EBITDA margin of 73%. The hospitality segment clocked a turnover of Rs. 161 crores in Q2 FY '27 with an EBITDA of Rs. 59 crores, a growth of 41%. EBITDA margin for the segment was 37% for the quarter, a growth of 700 basis points over Q2 FY '26. Consolidated PAT for the group stood at Rs. 219 crores at 18% and year-on-year growth of 29%. PAT after minority interest for Q2 FY '27 stands at Rs. 194 crores. In the quarter, as Pavitra highlighted earlier, we had saw completion of two leasing facilities, adding about 2.7 2.7 lakh square feet of leasing space. A large part of delta increased that you notice in the depreciation line item of our P&L in the quarter is contributed by this. Touching upon cash flow performance, collections for the quarter stood at 1,633 crores. The reduction in collection number, as compared to earlier quarters, was primarily due to milestone that got billed in the third month of the quarter and for which collections were in progress. This is also reflected in higher trade receiv-
Yogesh Patel (Brigade Enterprises Ltd): number in the balance sheet. Net cash flow from operating activities stood at 246 crores. We remain confident of sustaining healthy cash flows in the coming quarters and outlook to generate operating cash flow from operations for the entire financial year higher than that of FY26 in line with the segment performances. To give a segment view of the collections in this quarter, real estate segment contributed rupees 1,115 crores, leasing segment rupees 343 crores, and hospitality segment 175 crores. Coming to debt and liquidity, as of September 30, 2026, the group's consolidated gross debt stood at rupees 5,439 crores, and consolidated net debt outstanding was rupees 2,765 crores, adjusting for cash and cash equivalent of 2,674 crores. As detailed earlier, too, about 85% of our debt is backed by rental cash flow income and GOP from leasing and hospitality segments. The debt-to-equity ratio at the end of the quarter stood at 0.31 and our average cost of debt at 7.61%. Our investment for growth towards land acquisitions and capital asset creations would be met through a mix of options, including internal accruals and debt. The consolidated debt-to-equity ratio outlook for the year post funding for projected CapEx commitments and business developments spend is comfortable and will be well within 0.5x. We continue to maintain adequate liquidity backed by improved outlook of cash from operations in 2H of FY27 and credit options from banks and financial institutions. I would also like to mention that along with our financial results for this quarter, we have presented certain ratios as required by regulation 52(4) of SEBI LODR, pursuant to which pursuant to having issued listed commercial papers in the quarter. These ratios take the formula as per accounting requirements and guidelines. I will now hand it back to the moderator for questions.
Moderator: Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your 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 comes from the line of Sukrit D. Patil with Insight Fintrade Private Limited. Please go ahead.
Sukrit D. Patil (Insight Fintrade Private Limited): Good afternoon, to the team. I have two questions. My first question, to Ms. Shankar is, Ms. Shankar, sorry, following, our 29% net profit growth this quarter, what is our residential volume guidance, for the next, two quarters or specifically next next quarters? As we launch, 2.4 million sq ft of new projects, what key execution risks do you foresee and what is our forward, strategy to project margins from localized import cost spike? That's my first question. I'll ask my second question after this. Thank you.
Pavitra Shankar (Brigade Enterprises Ltd): Okay, you might have to remind me. I heard about three questions there. But in terms of the guidance for the year, we have reiterated 9,000 crores. For this first half, we've done around 2,800 or 2,900 crores, so the balance of around 7,000 crores is what we're hoping to and planning to achieve in the second half of the year, supported by that to come in Q3 and Q4. Execution risk for the projects to be launched, there I mean there's nothing material to really mention. There are the It's as per usual business plan. It's just a matter of getting the approvals and we will start construction. Sorry about the other questions you had asked.
Sukrit D. Patil (Insight Fintrade Private Limited): Yeah. Okay. My second question to, is to Mr. Patil, with Q2 EBITDA up about 26 27% to 470 478 crores, what is, our forward CapEx and debt guidance for FY27 28? And how are you managing working capital and liquidity risk across, our expanding commercial leasing and hospitality portfolios to protect, the cash cash flow?
Yogesh Patel (Brigade Enterprises Ltd): So, Mr. Patel, what what we have committed to in terms of So, our first quarter's, you know, first half cash collection or cash generation from operations have been around 600 crores. This number in terms of operating the free cash flow from operations is going to be much higher in second half the way I explained, you know, certain billing milestones which kind of from September onwards which are yet to be collected. And the higher uptick of sales and sales-led collections as well adding up to our milestone collections. All this would generate cash for investments and a combination of debt and internal cash accrual is what will fund our investments in our CapEx, which is our investment properties which become our leasing assets per se. And in addition to the land bank investments for growth. This would this debt which would come in, the current outlook of it based on our spend spend estimation. Today our debt equity which rests at.31 would be comfortably under 0.5x by end of March. So, that would be the difference in leverage anywhere between 0.4 and 0.5 but under 0.5 is what it would be from .31.
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