Buy Godrej Properties; target of Rs 3,000: Motilal Oswal

Motilal Oswal's research report on Godrej Properties

Godrej Properties (GPL) reported the highest ever bookings of INR95b, up 135%/66% YoY/QoQ and 47% above our estimate. In FY24, bookings stood at INR225b, up 84% YoY (61%/15% higher than guidance/estimate). Sales volume for the quarter increased 56%/88% YoY/QoQ to 8.2msf and realization was up 51% YoY to INR 11,650 psf due to higher contribution from Mumbai and the NCR.

Outlook

Despite strong progress made on BD over the last two years, GPL continues to aim for higher new additions, which would enable it to achieve targeted growth. The company has also reported healthy improvement in OCF in FY24, with a 23% YoY increase to INR43b. This trend is expected to increase further as GPL plans to launch the recently acquired projects on priority. This strategic approach is anticipated to enhance cash flow further, given favorable ownership of new projects. We believe GPL will continue to surprise on growth, cash flows, and margins, given its strong pipeline and healthy realizations, which have been the key investor concerns. We reiterate our BUY rating with an increased TP of INR 3,000, implying 17% potential upside.