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Godrej Properties (GPL) reported strong performance across several key metrics. The company achieved sales bookings of Rs. 51.98 billion in Q2FY25, representing a 3.3% year-over-year (YoY) increase, and collections reached Rs. 40.05 billion, indicating a 68.4% YoY growth. Operating cash flow increased by 126% YOY to Rs. 18.34 bn, and the company delivered 6.6 million square feet across 3 cities in FY25, up 326% YoY and 144% QOQ. This was the highest ever Collections, Operational cash flows and Delivery done by GPL in quarter 2 of the financial year

* Under the new agreement between Godrej & Boyce (G&B) and GPL, GPL will continue to serve as the development manager for the Vikhroli land owned by G&B. In terms of Business Development, GPL introduced added 10 new projects of 13.9 mnsf with a total Gross Development Value (GDV) of Rs. 174 billion in YTD FY25. This included 6 new projects with an expected booking value of Rs. 96.5 Bn in Q2FY25 and 2 new projects with an expected booking value of Rs. 48 Bn crores post-Q2FY25. GPL has achieved 87% of its annual guidance for business development.

* We anticipate that the momentum of project additions will continue in the coming years, supported by an increase in launches in regions outside the Mumbai Metropolitan Region (MMR), such as the National Capital Region (NCR), Bengaluru, Hyderabad, Pune, and others. In terms of Q2FY25 Presales of Rs. 51.98 Mn, Area wise Contribution is NCR - 23%, Bengaluru9%, MMR- 20%, Pune- 6% and Others were 2%. In terms of H1 FY25 presales of Rs. 138.4 Bn, Area wise Contribution is NCR - 39%, Bengaluru- 28%, MMR- 23%, Pune- 7% and Others were 4%. Q2FY25 Presales growth can be attributed to an extremely strong customer response to some of our new launches during the quarter, which includes Godrej Vrikshya in NCR, which delivered a booking value of just under Rs. 15 Bn and Godrej Woodside Estate in MMR, a development project with a booking value of just over Rs.6 Bn

* In H1FY25, GPL did pre-sale of Rs.14.14 mnsf, which was largely supported by NCR, Bengaluru and MMR. H1 FY25 Booking value increased by 90% Rs.138.4bn and collection grew by 62% YoY to Rs.70.17bn on the back of strong launch pipeline and inventory in these markets. The company is planning to launch a large number of exciting new projects in the future, with a robust launch calendar, with multiple projects coming online, including those in Gold Coast Road, Sector 44 in Noida, Bangalore, Pune, Kolkata, and Hyderabad. Cash flows to support BD and they have no further plans of raising capital.

Outlook & Valuation:

As real estate sector in India continues to hold its growth momentum post Covid backed by aspiration to own a home, rising per capita income and change in perception to deal with reputed over unorganized players we believe Tier-I developers will be the key beneficiary of this tailwind. GPL, post family arrangement on Vikhroli land, now there is more certainty on that piece of land which will help the company to fast track the launches from that land parcel. Despite a high base, they are confident of achieving infact outperforming their guidance of pre-sale of Rs.270bn, collection of Rs.150bn and deliveries of 12.5 mnsf. GPL has already achieved 51% of its FY25 Presales Guidance, 47% of it’s FY25 Cash collection Guidance and 63% of its FY25 Business Development Target.. We like to retain our positive view on the stock with a TP of Rs. 3564 (Based on 14 times its EBITDA, derived from FY25- FY27 Average Presales less Net Debt)

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