Buy Godrej Properties; target of Rs 2843: Motilal Oswal

Motilal Oswal's research report on Godrej Properties

GPL has delivered a strong presales CAGR of 50% over FY21-24 and outperformed all its peers. However, its presales are estimated to clock an 8% CAGR over FY25-27 due to the high base effect. Recently, GPL raised INR60b via QIP and is set to raise further INR20b via NCD to support its aggressive business development (BD) activities and debt reduction initiative. As of 4QFY25 end, GPL’s net debt-to-EBITDA (D/E) ratio stood at 0.19x and net debt was INR33b. GPL aims to be the top player in all its markets with a strong brand equity and a track record of timely delivery with quality product offerings. GPL is estimated to generate a cumulative operating cash flow of INR229b over FY25-27E. We reiterate our BUY rating with a revised TP of INR2,843, which includes a 75% premium to the high-growth residential business. Our TP implies a potential upside of 22%.

Outlook

We believe GPL will continue to surprise on growth, cash flows, and margins, given its strong pipeline and healthy realizations, which have been key concerns for investors. We reiterate our BUY rating with a TP of INR2,843, implying a 22% potential upside.