Godrej Properties Q3 Results Review -NCR Retaining The Top Spot In Presales Contribution: Dolat Capital

Dolat Capital Report

Godrej Properties Ltd. posted its best quarterly presales of Rs 57 billion (our estimate: Rs 55 billion); up 76% YoY and +14% QoQ. This was aided by the Gurgaon launch clocking presales of Rs 27 billion translating to National Capital Region share in overall presales mix at 58% (Q2 FY24: 54%; Last eight quarter averaging 36%). Notably all other focus markets broadly retained the QoQ presales run-rate.

Gross collections of Rs 76 billion (9M FY24) is set to beat the full year guidance of Rs 100 billion owing to delivery of units back ended during the year. Core free cash flow (excluding growth capex but adjusted for joint venture projects) for the quarter improved to Rs 6 billion (up more than two times YoY and +10% QoQ) versus last eight quarters average of Rs 4 billion. Execution pace is running steady with construction spends holding at ~Rs 10 billion for the quarter.

Overall, the execution gap to peers is narrowing and remains on track to deliver on FY24 guidance of 12.5 msf in project completion. High value project pipeline, improving micro market selection and rising economic share is set to aid margin and cashflow profile.

We align our quarterly presales run-rate to the underlying print of Rs 50 billion driving a ~30% change presales forecast for FY24E-FY26E.

Retain ‘Accumulate’ rating with a revised target price of Rs 2,650.

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