Mumbai-based real-estate developer Godrej Properties Ltd. is hopeful that the company will exceed its sales guidance of ₹14,000 crore for financial year 2024.

In a post-earnings interaction with CNBC-TV18, Executive Chairman Pirojsha Godrej said that the company has a robust launch pipeline across Delhi NCR, Gurugram, Mumbai and other parts of the country.

"“We have a pretty robust launch pipeline for the second half of the financial year, significant upcoming new launches in NCR with a few of the new Gurugram projects we added last year. We hope to launch our large project in Delhi in Ashok Vihar," he said, adding that there are launches upcoming in cities like Pune and Bengaluru as well.

Godrej also expressed hope that there would not be too many delays in terms of regulatory approval.

"If we are able to bring all of these projects to market, we can expect to see a pretty strong year from a booking’s growth perspective. And hopefully, we can go well past our guidance number,"

For the September quarter, Godrej Properties reported a 109% growth in overall booking value, while area sold increased by 93% year-on-year.

Godrej mentioned that the company has done disproportionate business development over the last few years.

"For example, last year where we had a little over Rs 12,000 crore of booking value, our business development locked in a future booking value of about Rs 32,000 crore, which again was intentionally disproportionate to immediate scale with this idea that it will allow us to deliver a kind of more rapid growth in an improving market," he said.

However, business development is no longer the top priority for the company as the existing portfolio can deliver the growth over the next two to three years.

Godrej Properties saw an increase in its overall debt to ₹6,174 crore from ₹5,298 crore during the same period last year. However, the company's Executive Chairman does not see it as a cause of concern.

"“Our gearing levels have gone up. We have guided, actually, ever since our IPO more than 10 years ago, the broad comfort range we have from a gearing perspective is about 1:1," he said.

"We used to say 1:1 to 1.5:1. So, we are still very much within that range. So, we don't see any real concern there. And operating cash flows will, we think, very significantly increased from the upcoming year onwards," Godrej Added.

Brokerage firm CLSA said that while the company's pre-sales were at a record, cash flow continues to lag.

"Operating cash flows will, we think, very significantly increased from the upcoming year onwards," Godrej told CNBC-TV18.

The brokerage further said that the company's aggressive business development, coupled with volatile operating cash flow may increase its debt further.

CLSA has a "sell" recommendation on Godrej Properties with a price target of ₹1,520.

On the flip side, Jefferies has maintained its "buy" rating on Godrej Properties with an increased price target of ₹2,100. It said that the management expects gearing to decline in financial year 2025 led by an uptick in operating cash flow and normalisation of project addition activity.

Out of the 22 analysts that track Godrej Properties, nine of them have a "buy" rating, six say "hold," while seven of them have a "sell" recommendation.

Shares of Godrej Properties are currently trading little changed at ₹1,715.

(Edited by : Hormaz Fatakia)

First Published:Nov 3, 2023 9:59 AM IST