Enthused by a new project launch in Mysore and rising demand in Bangalore, Viswa Prathap Desu, vice president- sales and marketing, Brigade Enterprises says the company is likely to get Rs 2500- Rs 2700 crore as its revenue in FY14.
Desu's optimism comes at a time when most realty markets are seeing a slowdown in sales.
“Bangalore market has not been a bubble market, in the sense it doesn’t rise up very fast. It has been a steady rise. The last two-three years have seen a good rise and last one year has seen lot of new launches in Bangalore market and it has been steadily rising. The prices are going up by 10-15 percent or maybe 20 percent over a period of 10-12 months except for few niche projects,” he explains.
Desu expects a 50-60 percent rise in its FY14 revenue and another 30-40 surge in its collections.
Below is the edited transcript of Desu's interview to CNBC-TV18.
Q: Talk about the new project that you have launched and if you could give us some details in terms of what are the price points and how many units are you launching right now?
A: We launched this project over the weekend. This is a project called Brigade Symphony in Mysore and it is probably the largest of its kind in Mysore. It is a 304 unit project and its spread over across the spectrum.
We have right from one bedroom apartment ranging from 790 square feet up to a four bedroom of 3,360 square feet. These prices start from Rs 30 lakh and go fitting everyone’s budget.
It is a seven acre land parcel where we are doing lot of outdoor facilities along with a nice club house. We have sports facilities like tennis court. Badminton court, basket ball and lot of play area for the kids. We have designed the project in such a way that there is a lot of open areas and apartment looks into the open greenery and each apartment comes with a patio, large balconies sort of things where one can spend time with the family just like the Mysore way of life.
Therefore, going forward we expect good response to this project. Infact during the launch, we had excellent walk-in in spite of it being a festival (Ganesh Chaturthi) weekend.
Q: How is the market looking in south specifically Bangalore because we have seen some bit of cool off in Mumbai, in National Capital Region (NCR)?
A: Bangalore market has not been a bubble market, in the sense it doesn’t rise up very fast. It has been a steady rise. The last two-three years have seen a good rise and last one year has seen lot of new launches in Bangalore market and it has been steadily rising. The prices are going up by 10-15 percent or maybe 20 percent over a period of 10-12 months except for few niche projects. So, that has held on to the market and it is more end user driven, not typically a pure investor sort of thing. Right now it is going fine and we hope it continues that way. It will probably be stable for a while and then as it go on it will go up because of the end user demand.
The Bangalore market is largely dependent on the IT sector and IT sector has started doing very well now also the dollar appreciating against the rupee. So, it has helped the IT sector.
Q: You have also revised your total sales guidance for the entire year. It now stands at 7.5 million square feet versus your earlier guidance of 6.7 million square feet. What will this mean in terms of revenues for the whole year?
A: We are looking at a topline between Rs 2,500 and 2,750 crore. So, it is a huge shoot- up from what we were looking at last year because this also entails a lot of new launches. We have got couple of more launches that are planned in this financial year and we hope to achieve that target. Generally, we are on track inspite of what is happening in the economy and as the Bangalore market is holding on and we see a good demand going forward.
Q: Because demand is so strong, are you expecting further increase in your collection because last quarter your collections went up 57 percent on a quarter-on-quarter basis. Does it get better in Q2 and going forward?
A: Yes. We launched few projects a quarter earlier and the collections have started coming in. So, we expect another 30-40 percent increase over the previous quarters’ collections. Hence, going forward, the collections are going to be much better.
Q: Give us some guidance in terms of your topline projection for the full year since you have a guidance of the total sales and also the average price?
A: We expect a 50-60 percent increase over last financial year.
Q: And in terms of profitability, in terms of earnings per share (EPS)?
A: I do not have my fingers on EPS but will definitely see growth going forward.