Brigade Ent to launch 10 million sq ft of projects in FY12

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Brigade Ent to launch 10 million sq ft of projects in FY12

Chairman and managing director of Brigade Enterprises, MR Jaishankar told CNBC-TV18 said that they would launch about 10 million square feet in this financial year. He also informed that they would be able to do about 31 million square feet of projects in FY12 in five-six years.

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See latest News about Brigade Enterp See previous management interviews See what other Experts & Brokerages are saying about Brigade Enterp Brigade Enterp BSE | NSE 30/05/12 Are Mutual Funds betting on Brigade Enterp?

Brigade Enterprises announced its fourth quarter results for FY12. The company's Q1FY12 total income was up 83% at Rs 168 crore versus Rs 92 crore. Profit after tax (PAT) of the company was up 93% at Rs 27 crore versus Rs 14 crore. The company's EBITDA was up 1.7 times at Rs 47 crore versus Rs 17 crore and EBITDA margin was up at 28% versus 18%.

Chairman and managing director, MR Jaishankar told CNBC-TV18 said that they would launch about 10 million square feet in this financial year. He also informed that they would be able to do about 31 million square feet of projects in FY12 in five-six years. He pointed out, "The 31 million square feet of projects would be launched in phases."

Jaishankar further stated, "The sales in residential has been about 200,000 square feet, whereas the leasing in commercial has been about half a million square feet."

"In addition to that, we have recently launched value homes in the range of Rs 17 lakh to Rs 30 lakh apartments. We have registrations of 600 apartments about 700,000 square feet," he added.

Here is the edited transcript of Jaishankar's interview. Also watch the accompanying video.

Q: Could you take us through the volume of sales in the April-June quarter as well as your realisations?

A: The volume of sales is reasonable. In real estate, we go on the basis of booking, percentage completion and other ways of accounting. Brigade group has always been conservative in the method of accounting. We have done both, commercial and residential.

The sales in residential has been about 200,000 square feet, whereas the leasing in commercial has been about half a million square feet. In addition to that, we have recently launched value homes in the range of Rs 17 lakh to Rs 30 lakh apartments. We have registrations of 600 apartments about 700,000 square feet. They will get treated as bookings in this current quarter.

Q: You have so many new launches coming up in the residential segment. What kind of sales momentum can you see in FY12? How will the residential buildings like Orchid Villas, Exotica and Omega contribute to your sales growth in FY12?

A: We are in the process. On hand, we have about 31 million square feet of projects which have received substantial approvals. Most of them are in the very final stages of obtaining approvals.

These 31 million square feet would be launched in phases. In this financial year, we should be launching about 10 million square feet. We should be able to do these projects in FY12 in five-six years.

Q: The economic data from the US has been very disappointing. We have been touching base with a lot of IT companies and there is certain trepidation about how billing will go and how order book will grow. The IT boys employed in Bangalore is your big clientele. Do you see signs of prices receding?

A: I don't see any signs of prices receding, but in my opinion there is inherent strength and optimism in the real estate scenario. From 2008 to 2010, the markets were weak. In the last one year, real estate market has peaked up substantially and there is optimism.

The development of the last two weeks is a matter of concern of the US downgrade by S&P. considering it as temporary phenomena, things should recover. In any case, real estate is a long term story and not a short term market. If one enters real estate, they should have a long term outlook.

Q: As much as 10 million square feet is the quantum in FY12. What about the hike in revenues and percentage growth in net profits? How much would you do - 20% to 30 % or more than that?

A: We should do 20-30% for sure. More than that, it is a bit premature to say because we need to see how the next three quarters unfold in view of the micro economic situation.