Office, hospitality segments hold key for Brigade Enterprises march
₹500 crore upon competition. Brigade’s hospitality segment saw occupancy level at 73%, up 500 basis points y-o-y. One basis point is equivalent to 0.01%.
Average room rate improved to ₹6,503 per day, up 7% y-o-y and was higher than pre-covid levels of ₹5,400. Healthy domestic demand, revival in foreign tourist arrivals and MICE (meeting, incentives, conferences and exhibitions) are expected to aid further momentum. The company currently has 1,474 keys and intends to add another 1,000 keys to its hospitality portfolio.
These developments will entail a new capex of ₹3,000 crore over FY25-28. So, timely completion would aid its profitability outlook. However, in a scenario of delays, the commercial and hospitality capital expenditure could put pressure on cash flows.
“While Brigade’s operational commercial and hospitality assets are performing well, any weakness in the upcoming projects could cause stress to the company’s cash flows and debt servicing," said Nuvama Research report. Brigade’s net debt increased to ₹2,111.5 crore in Q3FY24 from ₹1,592 crore in Q2FY24. With that, the net debt to equity ratio also rose marginally to 0.69x.
Its residential segment pre-sales are solid with the first nine months of FY24, pre-sales at ₹3,769.5 crore, 90% of FY23 pre-sales. In Q4FY24, the company is gearing up to launch around 2.6 million sq ft of projects with a gross development value potential of ₹1,800 crore across its existing projects in Bengaluru. Brigade continues to provide strong visibility until FY26, given the progress made on business development over the last few years, points out Motilal Oswal Financial Services.
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