Summary
Brigade Enterprises Limited - Q3 FY 2025-26 Earnings Call Summary Monday, February 02, 2026 04:00 PM IST
Event Participants
Executives 6 Amar Mysore (Executive Director), M.R. Jaishankar (Executive Chairman), Nirupa Shankar (Joint Managing Director), Pavitra Shankar (Managing Director), Pradyumna Krishna Kumar (Executive Director), Roshin Mathew (Executive Director)
Analysts 9 Adhidev Chattopadhyay, Akash Gupta, Anmol Mittal, Biplab Debbarma, Girish Choudhary, Heta, Karan Khanna, Murtuza Arsiwalla, Parvez Qazi, Pritesh Sheth, Prolin Nandu, Siddharth Misra
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Real Estate Collections | ₹1,258 crores | Stable YoY; impacted by fewer launches during the quarter. |
| Consolidated Revenue | ₹1,623 crores | +6% YoY; driven by steady performance across all three business segments. |
| Real Estate Revenue | ₹1,133 crores | Consistent performance; average realization grew 16% YoY to ₹13,142/sq. ft. |
| Leasing Revenue | ₹325 crores | +16% YoY; supported by 93% portfolio occupancy and GCC expansion. |
| Hospitality Revenue | ₹165 crores | +12% YoY; driven by a 17% rise in ADR and 17% growth in RevPAR. |
| EBITDA | ₹459 crores | Consolidated EBITDA margin stood at 28%. |
| Consolidated PAT | ₹206 crores | +24% YoY for the 9-month period; PAT after minority interest at ₹187 crores. |
| Average Cost of Debt | 7.61% | -115 bps YoY; reduction from 8.76% in December 2024. |
| Net Debt | ₹1,887 crores | Debt-equity ratio at 0.23; 92% of debt is rental-backed commercial debt. |
Geographic & Segment Commentary
- Real Estate: Presales stood at ₹1,750 crores (1.33 million sq. ft.) with 85% of sales coming from ticket sizes above ₹1 crore. Bengaluru contributed 50% of Q3 sales, followed by Hyderabad at 35% and Chennai at 15%.
- Leasing: Cumulative leasing reached 0.66 million sq. ft. in Q3; retail footfalls grew 5% while retail sales increased 16% YoY. Management is shifting strategy for Brigade Twin Towers toward a combination of sale and lease due to high demand.
- Hospitality: EBITDA grew 17% YoY; the company is currently building 1,700 keys across 9 hotels. The segment benefited from strong demand in the premium segment and rising ADRs.
Company-Specific & Strategic Commentary
- Land Bank Expansion: Incurred ₹2,100 crores for land acquisitions in 9M FY26, adding 14 million sq. ft. of developable area with an estimated GDV of ₹16,000 crores.
- Strategic Pricing: Management is underwriting new projects with a 7% annual price hike expectation, though they noted a shift toward smaller unit sizes to maintain “palatable” ticket sizes between ₹2-3 crores.
- In-house Construction: Increasing the share of in-house construction to mitigate risks associated with labor availability and subcontractor delays.
- Business Development focus: Significant traction in Chennai and Hyderabad; management is now evaluating entry into completely new markets beyond their core three cities.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Residential Launches | ~4.3 million sq. ft. in Q4 FY26 | Estimated GDV of ₹5,400 crores; reflects push-back from previous quarters due to approval delays. |
| Total Pipeline | 12 million sq. ft. next 4 quarters | Includes residential and 4.2 million sq. ft. of new commercial office launches. |
| Real Estate Margins | ~20% by Q1/Q2 FY27 | Expected improvement as newer, higher-margin projects replace older legacy projects currently being recognized. |
| Capex (Hospitality) | ₹800 crores in FY27 | Budgeted for the expansion of the hotel portfolio (1,700 additional keys). |
| Lease Revenue | ₹2,000 crores+ by 2030-31 | Long-term target once the current 6.7 million sq. ft. pipeline is fully stabilized and leased. |
Risks & Constraints
| Risk | Context |
|---|---|
| Approval Delays | Administrative shifts in Bengaluru (BBMP to GBA transition) caused 3-4 month delays in several project launches during FY26. |
| Affordability Caps | Rapid price appreciation in Bengaluru has led to customer sensitivity regarding total ticket sizes, requiring redesigns of unit sizes. |
| Regulatory Hurdles | The Brigade Morgan Heights project in Chennai faced a temporary sales halt due to a broader regional regulatory issue affecting 1 lakh properties. |
Q&A Highlights
Launch Delays (Akash Gupta/Pradyumna Kumar)
- Question: Why have launches missed targets when peers have not reported similar delays?
- Answer: Delays of 3-4 months were project-specific based on when files were caught in the Bengaluru administrative transition to GBA; things have now stabilized (Pradyumna Kumar).
Pricing Strategy (Karan Khanna/Pavitra Shankar)
- Question: Is there excess unaffordability in Bengaluru limiting future hikes?
- Answer: Demand remains healthy, but the pace of hikes is slowing for ticket sizes above ₹2.5 crores. Brigade aims for 5-7% annual increases rather than rapid quarterly hikes (Pavitra Shankar).
Twin Towers Strategy (Parvez Qazi/Nirupa Shankar)
- Question: What is the status of the unleased space in Twin Towers?
- Answer: Management is pivoting one tower towards a sale model rather than pure lease to capitalize on current demand (Nirupa Shankar).
Real Estate Margins (Anmol Mittal/Pradyumna Kumar)
- Question: Why are real estate margins currently moderated at 15%?
- Answer: Current revenue recognition is tied to older projects with lower pricing; newer premium projects will shift margins toward 20% starting H1 FY27 (Pradyumna Kumar).
Key Takeaway
Brigade Enterprises reported a steady Q3 FY26, characterized by consolidated revenue growth of 6% and a significant reduction in debt costs by 115 bps. While residential launches faced a 3-4 month delay due to administrative transitions in Bengaluru, the company maintained strong pricing power with realizations up 16% YoY. Management has aggressively expanded its land bank, committing ₹2,100 crores in 9M FY26 to secure a ₹16,000 crore GDV pipeline. The strategic focus is shifting toward “palatable” ticket sizes in the ₹2-3 crore range to counter affordability concerns while scaling the hospitality and leasing segments toward a ₹2,000 crore rental goal by 2031. Despite a flattish volume outlook for the full year FY26, the robust Q4 launch pipeline of 4.3 million sq. ft. positions the company for a stronger trajectory in FY27.
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