Godrej Properties likely to launch 17 new projects

The project - Godrej Summit, will be developed in partnership with Zara Sanya under an area sharing agreement, in which GPL will hold 65% stake. This is company's second project in the National Capital Region.

Also Read: Godrej Properties sells entire 1st phase of Godrej Summit in one day

Pirojsha Godrej, MD & CEO of Godrej Properties told CNBC-TV18 that Phase I, which comprises of 50% of the whole project has been sold on the first day itself.

The average rate was under Rs 6,000 sq ft and the company hopes to rake in Rs 1,200 crore revenue from this project. Going forward, they are planning a launch of 17 new projects. The stock shot up more than 3% today.

Below is the verbatim transcript of the interview

Q: Can you quickly take us through the response you have seen for 'Godrej Summit' and what is the kind per square feet (sq ft) you are selling in on an average?

A: We are very pleased yesterday we announced the launch of the project. Within one day sold out entire phase, which comprised 50% of the whole project. We sold about a million sq ft, which is 695 apartments. The average rate was just under Rs 6,000 sq ft.

Q: What kind of operating margins are you looking at for this project? What kind of revenue you think you can generate?

A: We don’t like to specifically guide on operating margins, it does depend on how costs move over the duration of the project, how successful we are in taking prices up in the next phase of the project. But, the kind of volume and demand we have seen is very encouraging.

This project has been launched at a fairly good price. So, this project will give us margins much above most of our recent projects. We are quite confident that the margin profile of the project will be very positive, but I wouldn’t like to put a specific figure to it.

In terms of bookings, we expect about Rs 1,200-1,300 crore of bookings from the project. It is of an area sharing arrangements about 65% of that will accrue to us over a period of time.

Q: The reason I am asking about the margins because this Rs 6,000 per sq ft is much higher than what most analysts were pegging it at and they were talking about a 50% operating profit margins as well. Do you think that is something that you can achieve with this particular project?

A: I think 50% is a little bit higher than we think we will achieve. It really does depend on how successful we are in taking prices up on further phases of the project. What is very encouraging about this is, with such a strong response, we can look at taking prices up quite substantially.

Now we can focus more on ensuring we take margins even higher. But what is very encouraging is that even though costs have risen during the time, we even at the launch have bee able to sell volumes that will allow us to achieve a very good margin.