Motilal Oswal's research report on Godrej Properties
Sales bookings fell 6% YoY and 4% QoQ to INR24b in 2QFY23. The same came in 10% above our estimate. With that, GPL has reported its highest ever first half sales of INR49b in 1HFY23. Sales volume declined by 25% YoY and 4% QoQ to 2.7msf. Blended realizations were flat QoQ, but rose 25% YoY to INR8,883/sq. ft. The company launched four projects, of which two were in NCR, with one each in Bengaluru and Pune. These projects contributed 37% to total bookings, with 40% of launched inventory sold in 2QFY23. GPL reported an improvement in cash flow, with collections up 39% YoY and 24% QoQ at INR22b. Operating cash flows (after interest and tax) stood at INR5.4b v/s a negative OCF of INR0.7b in 1QFY23. The company acquired a land parcel for INR8.4b, which led to a net cash burn of INR4b and an increase in net debt to INR1.4b, or 0.16x of equity.
Outlook
While the management’s target with respect to business development is strong, at 2x P/NAV, sustenance of this strong project addition momentum is already priced in. We reiterate our Neutral rating on the stock with an unchanged TP of INR1,300, a potential upside of 11%.
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