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Godrej Properties (GPL) clocked Q4FY23 gross sales bookings of Rs40.5bn vs. I-
sec estimate of Rs40.0bn led by 12 new launches across MMR, Pune and

Bengaluru. The company clocked record FY23 sales bookings of Rs122.3bn (up
56% YoY) and with a strong pipeline of ~20msf of launches in FY24, the company
has given FY24 sales booking guidance of Rs140bn (I-sec estimate of Rs147bn).
The company’s operating cash flows also improved with Q4FY23 operating
surplus of Rs22.5bn (ex land payments) vs. 9MFY23 surplus of just Rs12.3bn. For
FY24, the company is targeting new project additions having GDV of Rs150bn of
which majority may be through the JDA/JV route as it looks to limit increase in
debt levels. We maintain our HOLD rating with a revised target price of Rs1,318
(earlier Rs1,120) owing to new project additions. Key upside risk is rise in
residential prices and key downside risk is a rise in mortgage rates.

* Strong Q4FY23 sales bookings, cash flows impress as well: GPL clocked
Q4FY23 gross sales bookings of Rs40.5bn (up 25% YoY) vs. I-sec estimate of
Rs40.0bn driven by 12 new launches across MMR, Pune and Bengaluru. The
company clocked record FY23 sales bookings of Rs122.3bn (up 56% YoY) and with
a strong pipeline of ~20msf of launches in FY24, the company has given FY24 sales
booking guidance of Rs140bn (I-sec estimate of Rs147bn). While GPL generated
just Rs12.3bn of operating surplus in 9MFY23, Q4FY23 saw a sharp improvement
in collections to Rs38.2bn (up 127% QoQ) which led to Q4FY23 operating surplus
of Rs22.5bn which was negated by fresh land spend of Rs20.5bn and negative JV
adjustment of Rs11bn (as per company this will be recouped going ahead), GPL’s
net debt increased by Rs10.6bn in Q4FY23 to Rs36.5bn.
* Demand outlook remains buoyant, pricing uptick yet to kick in: As per
company, the demand momentum seen in FY23 is expected to sustain going ahead
as well and the impact of higher mortgage rates is not being seen yet on volumes.
As the residential real estate cycle continues its upward trajectory, the company
expects price hikes to follow in due course but will vary across markets.
* Business development plans remain aggressive: In FY23, GPL added 18 new
projects across 28.9msf having an estimated GDV of Rs323bn vs. its guidance of
Rs150bn. While FY23 turned out to be a year where majority of new project
acquisition were through the outright buyout route (100% economic interest), the
company has given guidance for FY24 GDV addition of Rs150bn once again but
expects a larger share to be through the joint development/JV route as it seeks to
balance higher operating cash flows from its existing land bank and also keep
gearing levels in check.

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