ICICI Securities has recently revised its stance on Godrej Properties, upgrading it from a ‘Hold’ to a ‘Buy’ rating, while adjusting the target price down by 11.5%, setting it at ₹2,515 instead of the previous ₹2,842. This rating change is attributed to the company’s impressive sales performance, solid operating cash flow, and a promising pipeline of new launches.
Strong Sales Performance Drives Upgrade
In the fourth quarter of FY25, Godrej Properties reported robust gross sales bookings totaling ₹101.6 billion. This surge is primarily due to successful new launches in key markets like Delhi NCR and Hyderabad. For the entire fiscal year of FY25, the company achieved remarkable sales of ₹29,400 crore, representing a 31% year-over-year increase and exceeding its original sales guidance of ₹27,000 crore by 9%.
- FY25 Sales Achievements:
- Gross sales bookings: ₹29,400 crore
- Year-over-year growth: 31%
- Guidance exceeded by: 9%
ICICI Securities maintains its forecasts for the upcoming years, anticipating sales bookings of ₹30,500 crore for FY26 and ₹31,200 crore for FY27. The firm emphasizes that translating these strong sales figures into substantial operating cash surplus—projected to reach ₹34.3 billion by the end of 9MFY25—is crucial for the company’s ongoing growth.
New Project Launches and Development Plans
In a significant update, ICICI Securities highlighted that Godrej Properties has planned new projects valued at ₹21,300 crore from April 2023 to March 2024, surpassing its initial estimate of ₹15,000 crore.
- Upcoming Fiscal Year Plans:
- Land capex in FY24: ₹5,400 crore
- Operating cash surplus: ₹4,300 crore
- Guidance for FY25 project additions: ₹20,000 crore
- Achieved project additions in FY25: ₹26,500 crore
The brokerage estimates a land capex of ₹7,000 crore for FY25, alongside a projected gross operating surplus of ₹6,400 crore and QIP proceeds of ₹6,000 crore.
Monitoring Net Debt Levels
As Godrej Properties continues to invest heavily in new land parcels to fuel its growth in sales bookings, the management of its net debt will be a critical factor to watch. As of December 2024, the company reported a net debt of ₹3,800 crore.
On the stock market, Godrej Properties saw its share price climb by 3.6%, reaching an intra-day high of ₹2,020 during Tuesday’s trading session. This rating upgrade comes after the stock experienced a 27% decline over the past three months. While the stock has provided a modest return of 1.5% in the past month, it has also witnessed a significant drop of over 36% in the last six months and more than 24% over the past year.
With these developments, investors are keenly observing how Godrej Properties navigates its growth trajectory while managing its financial commitments effectively.
