In a chat with media, Suresh Kris, CFO, Brigade Enterprises says that in terms of sales Brigade is actually better compared to previous quarter where the company has done about 0.35 million.
It has been a muted quarter for you this time around, what were the key highlights of the quarter gone by?
Basically this quarter is neutral for us and I would say that is in terms of sales. Normally for the real estate industry we should not look at quarter-on-quarter or year-on-year like this but for the full year only we need to see. In this front even when you take about half year comparison with the same half year comparison of last year we are more or less equal in terms of turnover and in terms of profit also we are actually slightly higher even though the reported profit is about 20 crores lesser or maybe you can say about 20% lesser compared to the last year. We have taken a onetime hit of about 32 crores expenditure otherwise our profit would have been higher by about 10-15%. And in terms of sales we are actually better when you compare it to previous quarter where we have done about 0.35 million now we have done close to around 0.6 million. Overall we have done about close to one million square feet compared to about 1.3 million square feet last year for the same half year.
I would have understood that the real estate industry is definitely dealt a body blow with the recent demonetisation scheme so I want to understand from you what has been the near term impact and what is the long term impact on your industry as well as for you specifically?
This is a very good question and in fact we need to answer this. Maybe since Brigade is also a part of, I would say real estate fraternity definitely because of the news we will get impacted for a few days or may be few weeks till the demonetisation settles down but we are one of the best compliant company in India. I would say even medium term as well as in the long term we are one of the big beneficiaries of this demonetisation because the transactions are very clean and neat for the customers. I mean to no surprise– to all the customers as well as to the management we still have booking even after declaration of the demonetisation, even last week we have good bookings so it will only improve the position of Brigade irrespective of what the real estate industry perceives and this is a good opportunity for the big companies who are the– I would say one of the best compliant in this environment, they will get very huge benefit in months to come. That is our view.
But naturally analysts are expecting some sort of price correction really to come into the real estate business because of the entire demonetisation move so in light of that are you anticipating any sort of price correction?
We are not anticipating a big price correction because once your stocks are about less than Rs.1.5 crore something I do not think what a big price correction may happen because of some of the unorganised players their systems or their model may be slightly different from the organised players. In that space may be around 10-15% correction may happen but more than Rs.1.5-2 crore or something definitely about 20% correction may happen in unorganised players but this also depends on the business model in which they operate but if it is organised players with the transactions are transparent and clean I do not think a big correction may happen. May be temporarily to sustain the sales they may go and correct at least about 5-10% if it is necessary otherwise for proper system I think they will be able to go on without much correction in the prices.
Credits ET Realty