Motilal Oswal's research report on Godrej Properties
Sales bookings declined by 22% QoQ to INR25b, but was better than our estimate of INR21b. Strong sales performance was driven by successful launches in Mumbai, which clocked over INR10b of sales, and its best ever performance in sustenance projects, which contributed sales of INR15b. Sales volume declined by 33% YoY to 2.9msf. Blended realizations rose 38%/16% YoY to INR8,900/sq. ft. due to higher sales in MMR. On a portfolio basis, the company raised prices by 5-7% YoY. GPL launched three new projects, two in MMR and one in NCR, with a total saleable area (TSA) of 1.2msf, of which 50% was sold in 1QFY23. Overall, it plans to launch ~19msf of projects in the remainder of FY23. Absence of any fresh deliveries in 1QFY23 impacted its sequential P&L performance. Revenue declined by 82% QoQ to INR2.5b. Operating loss stood at INR142m v/s a loss of INR635m in 1QFY22. PAT declined by 83% QoQ to INR435m, but rose 156% YoY. GPL’s P&L performance is expected to improve as it will deliver over 10msf of projects in FY23.
Outlook
At 1.7x P/NAV, a large part of this growth is already priced in. We maintain our terminal growth assumption at 3% as we await clarity and progress on business development. We reiterate our Neutral rating on the stock with an unchanged TP of INR1,300, a downside potential of 11%.
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