Godrej Properties, the realty arm of Godrej group saw 24% growth in net profit and its net sales went up 68%. Pirojsha Godrej, managing director and chief executive officer of the company, speaks to Raghavendra Kamath about the company's operations and overall property markets. Edited Excerpts:
What led to lower growth in profits?
It was due to base effect. Last year we had done a private equity deal. So numbers were higher. But if you look at Q3, total income went up 58% and EBITDA went up 63%.
You were planning to launch new phase in Ahmedabad. What is the progress on that?
That was one disappointment. It was delayed as final approvals are yet to come. Hopefully we will launch that in this quarter. Our project in Bandra Kurla Complex has also been delayed due to approvals. We are hoping to launch it in this quarter. We launched four projects during Q3 compared to two each in the previous quarters.
Have you tied up with any private equity for BKC project?
No. We are focussing on monetizing the project through launch and actual sales. There has been no development on PE front and we may do it at later stage.
What is the debt on the books?
We have a net debt of over Rs 1,500 crore now compared to Rs 1,600 crore earlier. We had operating cashflows of Rs 105 crore during the Q3.
Property consultants say prices have come down by upto 5% in Mumbai. What has been your experience?
We have not experienced any price cuts. If you take our Godrej Platinum project in Vikhroli in Mumbai, between October 2011 when the first phase was launched and October 2012, when third phase was launched, prices have gone up by 30%.
RBI has cut rates by 0.25 basis points. Do you see it translating into better sales for developers in the short term?
It may not translate immediately, interest rates are important factor for volumes in improving customer demand. We believe this is the first of several rate cuts in 2013. Yesterday's RBI action coupled with future actions and overall improvement on policy front will create better business environment and real estate sector will benefit disproportionately from that.
