Motilal Oswal's research report on Godrej Properties
Godrej Properties (GPL) reported bookings of INR50b in 2QFY24, up 109%/133% YoY/QoQ (27% above our estimate). Sales volume surged 93%/133% YoY/QoQ to 5.24msf. Blended realizations improved 8% YoY but declined 4% sequentially to INR9,600/sft due to relatively higher contribution from the plotted projects, which have lower realizations. Unlike 1QFY24, pre-sales during the quarter were largely driven by new phases/project launches, which generated 80% of total sales. The company launched seven new projects/phases with combined saleable area of ~5msf. GPL has indicated a launch pipeline of ~22msf for FY24 of which 6msf have been launched in 1HFY24. Management reiterated its guidance to exceed INR140b pre-sales in FY24. We expect GPL to clock bookings of INR150b. Revenue jumped 108% YoY to INR3.4b vs. our estimate of INR2.2b fueled by higher-than-expected project recognition. It reported an operating loss of INR0.7b. PAT grew 8% YoY to INR726m aided by other income of INR2.6b
Outlook
Sustained traction in BD continues to provide strong visibility on pre-sales growth. Further, improvement in profitability led by higher completions of projects with favorable ownership augurs well for the stock. We roll forward our estimates and reiterate our BUY rating with an increased TP of INR2,015 (implying 17% upside).
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