Brigade Enterprises gains on signing deal for residential project in Chennai

In a filing to the stock exchanges on Wednesday, February 21, the Bengaluru-based realty firm said that it has signed a joint development agreement with PVP Ventures Limited to develop a 2.5 million square feet, high-rise residential project in Chennai. The upcoming project will be spread over 16 acres in the Perambur suburban area.

The estimated revenue potential of the Chennai residential project is around ₹2,000 crore, the company informed the bourses.

After the announcement, shares of Brigade Enterprises gained 5% to an intraday high of ₹1,055.25 apiece on NSE. However, the stock pared early gains and traded at ₹997.3 apiece, down 0.77% at 12:17 PM.

Commenting on the new project in Chennai, Brigade Enterprises’ Managing Director, Pavitra Shankar, said, "The residential sector is showing sustained growth across the country, with Chennai gaining momentum from the increased presence of IT/ITeS, BFSI, manufacturing, automotive, and GCC companies in the region. We have a land bank of over 12 million square feet of residential projects across Chennai, which will be our second biggest market after Bengaluru.”

The company, through its wholly-owned subsidiary – Brigade Hotel Ventures Limited— has also signed a 45-year lease agreement with the landowners to build a 250-room resort on East Coast Road (ECR) in Chennai.

In line with Brigade Enterprises’ target to add 1200 keys to its existing room count of 1500 in the next four years, the East Coast Road property in Chennai will be the company's first resort property.

"Our aim is to cater to the discerning needs of modern travellers while providing experiences that seamlessly combine luxury, comfort and impeccable service. The addition of this resort under the Brigade badge will not only enhance our portfolio but also contribute to the growth and development of the hospitality sector in the region,” said Nirupa Shankar, Joint Managing Director, Brigade Enterprises Limited.

Brigade Enterprises reported a 30.7% rise in net profit in the December quarter to ₹55.7 crore compared to ₹42.7 crore in the corresponding period of the previous financial year. The company's EBITDA (earnings before interest, tax, depreciation and amortisation) rose 26% to ₹262 crore in Q3FY24 against ₹207.9 crore in the year-ago period.

Brigade Enterprises revenue also jumped 43.2% to ₹1173.8 crore in the December quarter from ₹820.3 crore in Q3FY23. Shares of Brigade Enterprises opened over 5% higher on Thursday. However, the share are now trading 1% lower after giving up early morning gains.