Street gives a thumbs up to Godrej Properties' strong Q4 bookings

Realtor Godrej Properties Limited (GPL) is present in top real estate markets such as Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Pune, and Bengaluru. In the financial year 2024-25 (FY25), NCR contributed 36 per cent, Bengaluru 17 per cent, and MMR 27 per cent to revenues with the rest 20 per cent coming from Pune, Hyderabad, etc. This presence across regions leaves GPL well-placed to benefit from upcycles in housing anywhere.

 

A comparison of guidance and reported data indicates that GPL will surpass guidance in FY25, with record presales bookings, higher Business Development, and area delivered. In FY25, presales exceeded guidance by 9 per cent and Business Development by 32 per cent. GPL may also surpass guidance of ₹15,000 crore in collections and 15 million sq ft (msf) in deliveries for FY25.

 

GPL has announced Q4FY25 presales of ₹10,200 crore (up 7 per cent year-on-year, or Y-o-Y, and up 87 per cent quarter-on-quarter, or Q-o-Q), which beat consensus comfortably. This is the highest ever presales achieved by GPL with the sale of 3,703 homes (cumulative area of 7.5 msf) in Q4. FY25 was the eighth consecutive year of presales growth for GPL (up 31 per cent Y-o-Y at ₹29,400 crore). GPL sold a total of 15,302 homes with an area of 25.7 msf and beat guidance for FY25 by 9 per cent.

 

The company enjoyed strong demand in new project launches in NCR (Noida and Gurugram), Hyderabad, MMR, and Bengaluru. FY25 presales saw NCR, MMR, and Bengaluru contributing ₹10,500 crore, ₹8,000 crore, and ₹5,000 crore to the total pre-sales, growing 4 per cent, 22 per cent, and 103 per cent Y-o-Y, respectively.

 

GPL has focussed on land purchase in its Business Development efforts with Gross Development Value of almost ₹80,000 crore in the last three years, mostly through outright land purchase. In FY25, Business Development additions was a Gross Development Value of ₹26,500 crore. GPL also raised ₹6,000 crore through a qualified institutional placement (QIP) in December 2024. Given the Business Development, there’s a steady launch pipeline for the future.

 

The presales bookings have led to good operating cash flow (OCF), which has grown at a compound annual growth rate (CAGR) of 30 per cent from FY19 to FY24, reaching ₹4,340 crore. In 9MFY25, OCF was ₹3,440 crore, implying 100 per cent Y-o-Y growth for FY25. The OCF as a percentage of collections improved from 29 per cent in FY19 to 38 per cent in FY24, and in 9MFY25 it was 34 per cent. This improvement is because of GPL’s rising economic interest due to outright purchases, which was at 85 per cent of presales bookings in FY24. 

 

The average realisation for the January-March 2025 quarter came in at ₹13,515 per sq ft, up 16 per cent Y-o-Y, with an 85 per cent growth in presales volume, and pricing improved 1 per cent. The growth was volume-led, with volume up 29 per cent Y-o-Y to 26 msf in FY25. Average realisation also improved 2 per cent Y-o-Y to ₹11,443 per sq ft during the period.

 

The strategic focus has ramped up economic interest and hence, returns and cash flow from its projects. GPL’s reputation to deliver quality projects on time has contributed to creating a respected brand. The company has leveraged that brand into excellent presales and its strong Business Development ensures that it can continue to launch new projects through the medium term.

 

Ahead of the business update that came in after market hours on Tuesday, Godrej Properties’ share price hit an intraday low of ₹1,869.50, lows last seen in December 2023. On Wednesday, even as leading indices were down, the stock was marginally lower by 0.17 per cent at around ₹1,971.

 

According to Bloomberg, 9 of 10 analysts polled in April are bullish on the stock, while only one has a “sell” rating. Their average one-year target price is ₹2,805.40.