Brokerage firm Jefferies expects Godrej Properties' profitability to improve from less than 10 percent of pre-sales to over 15 percent of pre-sales, as deployment of its recent land acquisitions gather pace.

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The brokerage has maintained its buy rating on Godrej Properties and raised its price target to Rs 1,850 per share from Rs 1,650 earlier. The revised price target implies a potential upside of 19 percent from Wednesday's closing levels.

Godrej Properties has added projects worth over Rs 50,000 crore since financial year 2021, which, according to Jefferies, would help improve margins. "The deployment of its recent land acquisitions has been gathering pace and residential real estate prices have also risen," the note said.

Since these acquisitions, some of the company's projects are selling at a premium of 13-17 percent than the initial price, the brokerage said.

“The fast pace of project acquisitions has led to gearing rising to 0.4x by March'23. Expect co to achieve 20 percent pre-sales Compounded Annual Growth Rate (CAGR) over the medium term,” it stated.

Jefferies also called Godrej Properties' current valuations, which are near the 10-year average price-to-book as 'attractive.'

On Wednesday, Gaurav Pandey, the MD and CEO of Godrej Properties told CNBC-TV18 that the Delhi-NCR region has been at the forefront of price appreciation and exuded optimism that the prices would continue to rise in the future.

The company expects bookings of Rs 14,000 crore and cash collection of Rs 10,000 crore in the current financial year.

It expects deliveries of 12.5 million square feet area and business development of Rs 15,000 crore in the current fiscal.

Godrej Properties last month announced acquiring a land parcel for a luxury residential project in Kolkata with a revenue potential of Rs 1,200 crore. It also acquired around 15 acres of land in Gurgaon with a revenue potential of Rs 2500 crore.

Shares of Godrej Properties are trading 2.9 percent higher at Rs 1,603.85. The stock is up nearly 30 percent on a year-on-year basis.