Analysts Expect Godrej Properties To Growth At A 'Rapid Rate' After Record Q4

Analysts expect Godrej Properties Ltd. to grow at a "healthy pace" after the real estate developer reported highest-ever quarterly sales and collections.

Godrej Properties' sales booking value rose 23% year-on-year to Rs 3,248 crore in the three months to March. Its booking value for FY22 rose 17% to Rs 7,861 crore. The company added three new projects with a saleable area of 6.1 million square feet in Q4.

It also logged quarterly collections of Rs 2,678 crore, leading to a net operating cash flow of Rs 1,045 crore in January-March. Executive Chairman Pirojsha Godrej said the company was looking to build the momentum in FY23 with "a robust launch pipeline, strong balance sheet and sectoral tailwinds".

Mohit Malhotra, managing director and chief executive officer at the company, sounded confident of the demand trajectory. The company "intends to add many more projects in FY23 in key priority markets of Mumbai Metropolitan Region and Bengaluru", he told the reporters on Wednesday. Besides the two markets, the company saw record sales in National Capital Region and Pune. Demand across segments, he said, is strong with the composition likely to remain similar to that of FY22.

Q4 FY22 Highlights (Consolidated, YoY)

• Net profit at Rs 260.47 crore versus net loss of Rs 191.57 crore. (Bloomberg Estimate: Rs 117 crore)

• Revenue at Rs 1,330.64 crore against Rs 432.64 crore.

• Ebitda at Rs 211.13 crore versus operating loss of Rs 222.36 crore.

Analysts' View

Shares of Godrej Properties rose intraday but reversed gains after the Reserve Bank of India surprisingly hiked repo rate. The RBI's announcement dragged the stock benchmarks, causing them to log the worst day in eight weeks.

Of the 20 analysts tracking the company, four maintain a 'buy', five suggest a 'hold' and 11 recommend a 'sell', according to Bloomberg data. The average of the 12-month target price implies a upside of 3.7%.

Here's what brokerages have to say about the company's Q4 FY22 results.

• Maintains 'buy', raises target price to Rs 2,100 from Rs 2,000, an implied return of 29.97%.

• Firm delivered a strong Q4 with pre-sales, cash collections and reported profits at a record.

• Management is aiming for pre-sales to cross Rs 10,000 crore in FY23 and a strong launch pipeline of 21 msf should help deliver it.

• New project additions at 6 msf were strong; though low gearing and a still early-stage housing cycle means much more should be done in FY23.

• Maintains 'neutral', cuts target price to Rs 1,750 from Rs 1,800, still an implied return of 8.31%.

• Firm reported highest-ever quarterly sales and annual pre-sales and collections, in line with expectations.

• Value of bookings also rose 17% to Rs 7,860 crore in FY22, a record.

• Raises FY23/24 pre-sales estimate by 1%/2%.

• Expects the company to continue to grow at a healthy pace.

• MMR and Bengaluru remain the company's top priorities, while it also pursues new project additional opportunities in key focus markets.

• New project additions outside its four core markets will mostly be under the plotted development category.

• Maintains 'sell', raises target price from Rs 1,205 to Rs 1,215, an implied return of 24.80%.

• New launches across existing/new projects drove the bounce back in gross sales booking in Q4.

• The company's strong launch pipeline heading into FY23 bodes well for growth prospects.

• The company's decision to mitigate cost inflation by dialling in single-digit price hike is a positive.

• The firm's outlook for FY23E remains strong as it targets Rs 10,000 crore in FY23E sales bookings.