Godrej Properties places building blocks for FY25, but may stumble

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₹2,912.45 apiece on Tuesday, marking a 10% increase over the past three trading days, driven by impressive results for the March quarter (Q4FY24). The company's pre-sales, or booking value, reached ₹9,500 crore for the quarter, leading to an annual total of ₹22,500 crore—an 84% increase that surpassed the guidance of ₹14,000 crore. This surge was primarily fuelled by strong demand in new project launches, resulting in volumes growing 88% sequentially to 8.17 million square feet (msf).

The robust quarterly pre-sales translated into the highest-ever quarterly collections at ₹4,690 crore. These collections have effectively addressed earlier concerns regarding low operating cash flow. Additionally, this jump in operating cash flow in tandem with lower spending on land acquisitions led to a healthy free cash flow.

This aided debt repayment of ₹700 crore, bringing net debt down to ₹6,200 crore. The management's bullish outlook on future growth has further buoyed investor confidence. Having exceeded guidance on all fronts, Godrej Properties anticipates a 20% increase in pre-sales and a 30% increase in collections for FY25, supported by upcoming launches valued at ₹30,000 crore.

The company also projects a 20% compound annual growth rate (CAGR) in pre-sales over the next two to three years, driven by a solid pipeline of project launches. In FY24, the company continued its strong business development momentum, adding 10 new projects with a saleable area of 18.93 msf, valued at ₹21,200 crore, more than the target of ₹15,000 crore. For FY25, it has guided for project additions with a gross development value of ₹20,000 crore.