The benefits of Section 80IBA in the affordable housing scheme will have a positive impact on our profits, says Atul Goyal, chief financial officer, Brigade Enterprises. In an interview with Swati Khandelwal, Goyal said growth in IT and ITeS segment will give a boost to residential projects and the company will launch new projects in Chennai, Hyderabad and Bengaluru.
A major increase has been seen in interest and depreciation as we have capitalised a lot of projects and leased 3-4 projects, including hospitality projects. They will take time to stabilise. Revenue generation, when it starts, will help in doing away the aberration. However, we have maintained our Ebitda margin at 27%.
Margins will be maintained at our end, especially when we are shifting towards affordable and mid-income housing. Secondly, the benefits of 80IBA available under the affordable housing scheme will have an impact on net profit. Thirdly, hospitality has done good on a year-on-year basis, but generally, it remains down in the first quarter because of the election and high airfares. However, it will improve in the subsequent quarters and our revenue will absorb interest and depreciation costs.
We have sold 1.13 million square feet, highest by the company in any quarter. If you look at Bengaluru, then we have the second-highest sales, and maximum traction has been seen in the affordable and mid-income housing segments. The demand is here to continue, and this is an overall country phenomenon. Luxury housing is lagging at present, but it will gain pace with time. I feel sales will increase, and the second thing is that organised developers are getting good business, and that's why there is an increase in their market share, and this is pushing sales. If you have a look on absorption. 6 million square feet has been absorbed in Bengaluru in the first quarter, and it is creating demand and bringing jobs. IT & ITeS sector has contributed a lot to it, and that is why I believe that the momentum of the residential sales will remain the same in future quarters as well.
We have given guidance of 3 million square feet this time and will continue with it. We have done 0.77 million sq ft in this quarter and that's why I feel that it is a reasonable target. Both of our projects are SEZs, and if you have a look at the overall market then SEZs' share in terms of office space is quite big, and this is the last time because there are no more SEZs in the market post-March 2020. Therefore, I feel that our leasing momentum will continue at the same pace.
The realty sector has gone through a tough time in the last 4-5 years. I feel a slight revival is coming because any industry can't continue to be dampened continuously. More bounce has been seen in the mid-income and affordable housing segments. People are quite conscious towards the price and if you are bringing a property at the right price and at the right location then it is sold out. Besides, leasing business will continue to grow in the future and good growth in the IT and ITeS segment will give a boost to the residential segment. We will be launching 6.42 million square feet of new projects, under which we will develop a luxury residential project near Chennai. We will also come up with a mid-income housing in Hyderabad, where we have a good plot. Similarly, we will be launching the next phase of the project in Utopia, Bengaluru. We will launch an affordable housing project under Orchards project near the airport. We have launched affordable housing in El Dorado near the airport in the first quarter, and depending on the response, we have plans to bring additional phases. I think our launches in mid-income and affordable segments will be successful.
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