Godrej Properties’ share price hit a fresh 52-week high of Rs 1,616 on July 6 morning, as foreign broking firm Jefferies re-iterated its “buy” call on the stock and raised the target price to Rs 1,850 from Rs 1,600.
Godrej Properties' profitability should rise from less than 10 percent of pre-sales to over 15 percent, the brokerage said.
At 10 am, the stock was quoting at Rs 1,604.90 on the NSE, up 2.91 percent from the previous close. Jefferies' revised target price is 15 percent higher than the current market price.
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"The Rs 50,000 crore project adds made since FY21 should deliver margin upsides. Stock valuation at average price-to-book is lower than +1 standard deviation for the sector," Jefferies said in its report.
In a recent interaction with CNBCTV18, Godrej Properties MD & CEO Gaurav Pandey said, "Over the past couple of years, the National Capital Region (NCR) has emerged the leader in terms of property price appreciation, both for us and for most developers operating in that market."
He said that there is a reasonable probability that property prices will continue to climb. This expectation is grounded in the region's ongoing development projects, infrastructure advancements, and the increasing demand for housing and commercial spaces.
In Mumbai, where Godrej Properties is already a dominant player, the number of housing units registered in June increased 5 percent month-on-month and 4 percent year-on-year to 10,319 units.
According to Nuvama Institutional Equities, it was the best-ever June-month performance in a decade.
"The Mumbai market has been stable despite interest rate hikes and the levy of metro cess. Increase in wages and employment opportunities and return-to-work scenario are expected to keep home buying activity healthy," Nuvama analysts added.
In this backdrop, Godrej Properties has been rallying, having gained 57 percent since April. The company has given a guidance of Rs 14,000 crore worth of bookings in FY24 and has a pipeline of close to 28 projects/phases.
The company has a net debt of about Rs 3,600 crore.
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