Property biz slump affected nos: Godrej Industries

Godrej Industries has announced its first quarter results. The company's Q1 consolidated net profit was down at Rs 16.4 crore versus Rs 52.8 crore. Its consolidated net sales were up at Rs 763 crore versus Rs 830 crore.

Commenting on the company’s results, Adi Godrej, Chairman, Godrej Industries, said the company’s consolidated numbers have been impacted by bad numbers from Godrej Properties.  

He added that the company has completed its minimum quota of buyback and that the buyback cost was at Rs 28–29 crore.

Here is a verbatim transcript of the exclusive interview with Adi Godrej on CNBC-TV18. Also watch the accompanying video.

Q: Could you walk us through what has happened at the net profit front? Why has there been such a sharp slip YoY?

A: You must remember that these are the consolidated numbers of Godrej Industries that includes a lot of other businesses that are subsidiaries or associates. The main difference was in our property business, Godrej Properties. This quarter was a low quarter for Godrej Properties. We did not have much stock to sell.

Also, as you know, property prices are down. So, Godrej Properties’ results in the first quarter were much poorer than the corresponding first quarter of the previous year. Most of the other businesses performed better than in the same quarter of the previous year.

Godrej Properties should do exceedingly well during the rest of the year. We expect Godrej Industries, as a whole, also to have a much better year, this year, than last year. But the first quarter was a poor quarter for the properties business.

Q: How much did you have to incur by way of losses, purely, in the real estate business this quarter?

A: Godrej Properties did make a profit, there was no loss. But last year saw very high profit in Godrej Properties.

Q: What exactly happened on the agriculture business side?

A: Agriculture business did well. The animal feed business had a higher PBIT than in the previous year.

Q: How did the buyback go about?

A: The buyback has been completed. We could not complete the entire buyback because the Securities and Exchange Booard of India (Sebi) passed the buyback quite late. We had only up to, I forget, July 20 or something to complete the buyback. But we have done the minimum quantity that we were supposed to do––20 lakh shares. We did a little more than the minimum. The buyback cost us about roughly Rs 28–29 crore. It has been completed.

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