Godrej Properties has target of Rs 900: PN Vijay

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Godrej Properties has target of Rs 900: PN Vijay

Godrej Properties has target of Rs 900, says PN Vijay, Portfolio Manager.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by PN Vijay See what other Experts & Brokerages are saying about Godrej Property See messages about Godrej Property

Godrej Properties has target of Rs 900, says PN Vijay, Portfolio Manager.

Vijay told CNBC-TV18, "Godrej Properties is moving with the tide. Suddenly, real estate is coming into its own. It has been the real laggard among rate sensitives for the right reasons. Real estate companies are generally loaded in debt and have problems of oversupply. I have chosen Godrej Properties because within the sector, one would like to play a bit safe. Godrej is arguably the most respected name we have in the real estate space. Last quarter was mixed for Godrej Properties, the top line almost tripled."

He further added, "The EBITDA de-grew because of various operational costs going up, but the net profit went up pretty smartly by 84%. Last quarter was one of the worst for real estate companies as they were hit by interest rates, falling demand and higher commodity prices slowly coming down. Going forward, all this scenario would change for the entire industry and to some extent to Godrej also. As far as the Vikhroli redevelopment project is concerned, the first tower is 90% sold out and they are going to start their second tower, the platinum tower in this quarter. That should lead to improvement in this."

"Godrej's debt has gone up compared to earlier quarter because of their project in Bandra-Kurla complex with Jet Airways. But going forward, fresh equity placement and monetization of some of their already inbuilt properties would reduce the debt substantially. I am hoping to get a trigger in Godrej Properties from a good reduction in debt."

"Their other prestigious projects in Ahmedabad, Chennai, Bangalore and Gurgaon are going on stream. I expect Godrej to come back and start performing very well. It's not cheap among the price earning real estate stocks, it is one of the higher ones at Rs 650, but I am giving a target of Rs 900 for Godrej in next 15 months."