This article first appeared on GuruFocus .
Release Date: February 02, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Brigade Enterprises Ltd ( BOM:532929 ) achieved pre-sales of INR 1,750 crores and a pre-sales volume of 1.33 million square feet in Q3 FY26, with a 16% growth in average realization per square foot over the previous year.
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The company has a strong pipeline with approximately 12 million square feet of launches planned over the next four quarters, indicating robust future growth potential.
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Brigade's commercial office portfolio maintained a healthy occupancy rate of around 93%, supported by steady demand from sectors like healthcare and education.
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The hospitality segment showed significant growth, with revenue and RevPAR increasing by 14% and 17% respectively, driven by a 17% rise in ADR.
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Brigade Enterprises Ltd ( BOM:532929 ) has reduced its average cost of debt significantly by 115 basis points to 7.61%, enhancing financial efficiency.
Negative Points
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Quarterly sales did not increase significantly due to approval-related delays for launching new projects, impacting the sales trajectory.
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Operating cash flow has declined substantially, attributed to higher construction costs and elevated sales and marketing expenses despite limited launches.
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There are ongoing regulatory hurdles affecting projects like Brigade Morgan Heights, with hearings expected to resolve issues.
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The company faced delays in project approvals, particularly in Bangalore, affecting the timing of launches and sales.
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The real estate segment's margins have moderated, primarily due to older projects being recognized and the impact of Ind AS accounting.
Q & A Highlights
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Q: Could you share some thoughts on the pricing environment in Bangalore and Chennai, and what kind of price increases do you expect? A: The market remains healthy with good demand. We expect to take price hikes of 5-7% year over year. However, the ticket sizes have increased, leading to stabilization in the market. This holds true for both Bangalore and Chennai. (Pavitra Shankar, Managing Director)
Q: Why have launches this year been skewed more towards Q4 compared to previous years? A: Launches were more towards H2 due to delays in approvals, causing many projects to slip into Q4. We are working hard to ensure these projects launch soon. (Pavitra Shankar, Managing Director)
Q: What kind of IRRs are you looking at for new business developments, particularly in Hyderabad? A: We target an IRR of around 18%. As customer pricing increases, land rates also rise, but we maintain this IRR target. (Pavitra Shankar, Managing Director)
Q: Could you provide an update on Brigade Morgan Heights and the regulatory hurdles it faces? A: We expect the hearing to happen soon and are hopeful for a resolution by the end of the month. This issue affects many properties, and we are optimistic about a positive outcome. (Pradyna Krishna Kumar, Executive Director)
Q: How are your projects progressing in terms of execution and timelines? Are there any challenges? A: We have increased in-house construction to mitigate issues with subcontractors. While labor availability can be a challenge, we are confident in meeting our delivery schedules. (Pavitra Shankar, Managing Director)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
