Buy Godrej Properties Ltd For Target Rs. 2,520 by Choice Institutional Equities Ltd
Record High First Quarter Pre-sales, Backed by Launches
Godrej Properties Ltd. (GPL) delivered a healthy YoY performance in Q1FY27, recording its highest-ever first-quarter pre-sales. Bengaluru accounted for 44% of pre-sales, followed by MMR (21%), NCR (18%), Pune (11%) and Hyderabad (5%). GPL added three projects (8 msf; INR 95 Bn GDV) in Q1FY27, reaching 48% of its FY27E business development target.
Strong Pipeline Ahead: Sales in Q1FY27 were driven by a strong demand in new project launches including Godrej Vanantara (INR 32.4 Bn), Godrej Samaris (INR 12.5 Bn) in Gurugram and Godrej Brooklyn Avenue (INR 3.17 Bn) in Hyderabad.
Maturing Prices can Easily be Offset by Strong Growth: GPL generally sells ~80+% of the inventory in a launched project while the remainder is retained to capture any price appreciation. Price increase in most of GPL’s launched projects across regions has been in the low single digit, which is quite modest, but it is understandable, given the maturity of the cycle. GPL’s launch pipeline and opportunistic business development, in our view, can easily offset possible slowdown in price increase
Valuation: We maintain our ‘BUY’ rating on GPL. Based on the SOTP valuation approach, we arrive at a target price of INR 2,520/share factoring in ongoing and upcoming owned/JV projects, DM & commercial project pipeline and its land bank
Risks: A possible broad-based slowdown in the domestic economy and probable delays due to regulatory procedures.
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