Godrej Properties clocks record pre-sales in Q3, profit up 6%. Should you buy, sell or hold?

The Godrej Properties stock have risen 47.33 percent in the past six months.

Brokerages remain bullish on Godrej Properties (GPL) after the real estate player clocked its best-ever pre-sales in the December quarter of the current fiscal at Rs 5,700 crore, rising 76 percent from the year-ago period.

Godrej Properties reported a 6 percent year-on-year increase in consolidated net profit at Rs 62.47 crore in the third quarter.

Revenue was up 68 percent at Rs 330.44 crore, the company told exchanges on February 6.

8 new projects boost bookings

The pre-sales were aided by eight project launches during the October-December period, which contributed around 69 percent to the bookings.

The bookings for the nine months ended December 31, 2023 reached Rs 13,000 crore, which is 93 percent of the company’s FY 24 target, the company said.

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The collections were Rs 6,740 crore for the nine months, 67 percent of the guidance for the current fiscal.

“The booking value in 9M FY24 was 106 percent of booking value for the entire FY23, which was GPL's best ever year previously,” the company said.

Brokerages bullish

International broking firm Jefferies raised its target price from Rs 2,635 to Rs 2,700 a share while maintaining its “buy” call.

“Back to back record pre-sales quarters and a strong launch pipeline for 4Q puts Godrej Properties in range for another 50 percent plus sales growth this year,” the brokerage said.

Jefferies said revenue was a miss at Rs 330.44 crore, as a result of no significant project deliveries during the quarter.

GPL has indicated that a few of its key projects, such as Worli (MMR), Ashok Vihar (NCR), and Sarjapur (Bengaluru) are likely to be delayed. However, excluding these projects, the launch pipeline for 4QFY24 remains strong.

“While management has reiterated its guidance to achieve Rs 14,000 crore of pre-sales in FY24, we expect the company to clock bookings of Rs 19,500 crore,” Motilal Oswal said.

The brokerage left its “buy” call unchanged with a price target of Rs 2,855 a share.

Morgan Stanley retained its equal-weight call, with a target price of Rs 2,050 a share. With the high land spending of Rs 4,200 crore, the net debt/equity ratio has risen, it said.

Nuvama Institutional Equities also maintained its “hold” rating, with a target of Rs 2,338, a tad lower from the previous Rs 2,358.

CLSA, however, took a different view and retained its “sell” call, with a price target of Rs 2,110.

The brokerage said the cash flow continued to lag, as spending on land raised debt despite record-pre-sales.

On February 6, the stock closed at Rs 2,300.8 on the National Stock Exchange, down 0.95 percent from the previous close.

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