Motilal Oswal's research report on Godrej Properties
GPL delivered a strong operational performance in 4QFY22, with sales bookings up 23% YoY to INR32.5b - its highest ever, but in line with our estimate. Volumes were flat YoY at 4.2msf, while realizations rose 22% to INR7,700/sq. ft. Value of bookings increased by 17% YoY to INR78.6b in FY22, which was also a record, while sales volume remained flat at 10.8msf. GPL launched nine projects/phases with a total saleable area (TSA) of 5.7msf, of which 50% was sold in 4QFY22. In FY22, the company launched 10msf against 16msf of planned projects. Collections were also the highest ever in 4Q/FY22 at INR29b/INR78b (up 44%/78% YoY). OCF after interest, taxes, and JV adjustments were flat YoY at INR4.3b. Net off INR5.7b of land payout, the company had a cash burn of INR1.5, which led to rise in net debt to INR4.6b. The company delivered 5.8msf of projects in 4QFY22, which led to a significant improvement in P&L recognition. Revenue trebled YoY to INR13.3b and led to an EBITDA/PAT of INR2.6b v/s a loss in 4QFY21.
Outlook
We raise our WACC assumption as we incorporate a higher risk free rate (7.1% v/s 6.5% earlier). Our TP decreases to INR1,750 from INR1,800 earlier, indicating an upside potential of 8%. We maintain our Neutral rating.
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