Godrej Properties investors happy with record booking

Godrej Properties registered its highest ever quarterly and annual sales performance during the period under review. In a statement issued today, the company said that the sales volume for the quarter increased by 19% sequentially from 4.42 million square feet (MSF) to 5.25 MSF. The sales volume increased by 40% to 15.21msf from 10.84msf for FY23. Management said the strong growth for the year followed an improvement in project mix as well as strong volume growth.

Cash collection and project delivery also touched new heights.

In addition, the company added 18 new projects in FY23 with a total estimated salable area of ​​around 29 msf and a total estimated booking value of 32,000 crores. This is more than double the business growth guidance of 15,000 crore of the estimated booking value for FY23, the press release stated.

The company is on track to achieve its pre-sales target of Rs 20,000 crore by FY26, with the project expecting another strong year in FY24, according to analysts at Motilal Oswal Financial Services. Hence, the research house has seen its FY24E/FY25E Pre-Sales grow by 23-44% after including the recently added projects.

Acceleration in the pace of business development and improvement in visibility on bookings are positive. Remember, though, that the company’s aggressive land acquisition strategy and increased debt weigh heavily on the stock, especially as many peers race to reduce debt. The concern is that Godrej Properties’ cost of borrowings could rise on further transmission of interest rate hikes. As a result, Godrej Properties stock has declined by 28% in the last one year. This is double the 14% fall of the sector index Nifty Realty in the same period. Therefore, management comment on these aspects would be important.