Bangalore-based real estate developer Brigade Enterprises sees a year-on-year topline growth of 25-30 percent in FY14. The company’s operational income increased around 12 percent in its earnings for the June quarter. New project launches in the coming quarters will ensure sales from Bangalore market of at least three million square feet, says Suresh Kris, CFO, Brigade Enterprises.
Average realisations will be more than the current Rs 4,700 per sq ft as new projects have been priced higher, he told CNBC-TV18. Also, the income from leasing segment and less impact of slowdown in the Bangalore market will boost sales, he adds.
Below is the edited transcript of his interview to CNBC-TV18.
Q: You have had a stable operational performance this quarter. Can you give us some guidance for FY14? How is your launch pipeline looking like?
A: Even though we are not in a position to give you the guidance every quarter or year, we can give you an indication that at least 3 million square feet sales will be achieved because of launching of new projects in Bangalore.
We have already launched about two projects in Bangalore, which are very good and have been well received in the market. Some more launches are expected in this year.
Q: This quarter, the realizations have improved to Rs 4,700 per sq ft. What will your average realisations look like for all of FY14?
A: The launched project prices are slightly more than this, more than Rs 5,000-5,500. So, the average realisation will be slightly higher than this going forward.
Q: What about the launch pipeline? How is that looking from now till the end of year? Also, which are the projects currently underway?
A: We are thinking of launching our own 6.2 million square feet for the balance nine months out of which our economic interest may be around 4.5 million square feet. These are the projects which are planned and all the projects are in advanced stage.
Q: You also have a lease model and the market is quite excited about that. How is that looking off late? How much have you leased so far? What would be the revenue run rate?
A: We have leased out our 1.2 million square feet and balance we have only around 0.2 million square feet to go forward. May be it will increase a little in the months to come. But we will be able to sustain with Rs 30 crore or more per quarter during this year. It could be slightly higher but minimum it could be around Rs 30 crore per quarter.
Q: An issue that keeps coming back to investors is the current slowdown even in IT hiring. In that context how is the Bangalore market looking? Do you expect it will grow at the current pace or are you already detecting any sign of slowdown?
A: Bangalore market still has some demand. But it can be sensed outside the Bangalore market.
Q: So what can you pencil in as top line and bottom-line growth for FY14?
A: May be around Rs 800-1000 crore could be the top line. We are now targeting about 25-30 percent top line growth year-on-year.