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Godrej New Projects - Godrej Pre Launch Projects - Godrej Properties

Author: Manish Mishra
by Manish Mishra
Posted: Dec 22, 2017
godrej agrovet

We will continue to launch new products in Godrej Consumer Products and Godrej Agrovet. We continuously do that and many of them are backed by R&D and are consumer benefitting. In Godrej Properties, we have already launched several projects. We may launch a few more projects in the second half and we are very buoyant both about the Indian economy and the performance of our businesses.

GST rates are reduced on agricultural products. Does that augur well for Godrej Agrovet? How much better will the second half be? Do you believe if economic growth will lift other segments as well?

We expect better growth than in the second quarter and overall the Indian economy will also do well. We are looking forward to a very good second half as I mentioned.

Our first project in Greater Noida has been an outstanding success. We entered the market much later, compared to other developers, only a few years back, and have been able to build a strong project portfolio based on project design and execution.

In NCR, the Mumbai-based GPL has around 10 projects with total developable area of 23.3 million sq. ft. The company has total developable area of 53.8 million sq. ft. in Bengaluru and Mumbai.

Large developers based in the region, such as Guru gram-based DLF Ltd, India’s largest, decided to focus more on its commercial office portfolio while Unhitch Ltd battled liquidity and legal issues.

Developers have been dragged to court over consumer complaints or have insolvency proceedings initiated by National Company Law Tribunal against them.

Bengaluru: Godrej Properties Ltd (GPL) has managed to break a prolonged bad spell in the National Capital Region (NCR) market, the country’s largest and worst affected by the slowdown in property sales.

In its 100-acre township project in Greater Noida, GPL’s first in the micro-market, it has sold homes worth Rs1,000 crore since its November 2016 launch.

Godrej Agrovet flattish, future performance to improve

The chemical business saw revenues growing by 12 percent in Q2 and 20 percent in 1HFY18. However, high raw material prices and a subdued demand post GST impacted profitability with profit before interest and tax down 17 percent in Q2. The export portion provided support with a 26 percent YoY growth.

Valuations

GIL stock has run up 32 percent since the start of the year and had seen 9 percent rerating in October during the IPO of Godrej Agrovet. Looking at the current multiples, the company is trading at a 28X FY19 earnings.

Oil Palms Business – The oil palm business reported a 17 percent YoY rise in revenues during the quarter. The company reported improved cost efficiencies along with better oil extraction ratios which benefitted profitability.

The Road Ahead

The properties business is expected to sustain the improved margins in the coming quarters and remain the frontrunner for growth. Its focus on the joint development or management model to execute projects allows it to grow significantly faster than peers without stretching its balance sheet.

With low feed prices and high animal protein prices, the farmers stand in a profitable position and this profitability would help in expanding the animal farm market, which would benefit volumes in animal feed business in coming quarters.

"We aren’t selling cheap. It’s a combination of factors that have worked for us including right product, strong market, sales and distribution network and the fact that we are focused on executing and delivering the projects we take up,".

"Godrej sold in Gurgaon when no one else was able to sell. They didn’t cut prices or toe the affordable housing line, when most developers have been re-configuring projects to suit homebuyers.

On the business development side, GPL signed a record number of deals in the first six months 2017-18, adding eight housing projects.

"We are also in different stages of discussion for multiple projects across NCR through all our business models. We would also like to enter Faridabad, where we currently don’t have any project," he said.

This year, it bought a 14.8 acre land parcel in Dwarka Expressway from BPTP Ltd. BPTP is among the many developers in the region that want to either sell their land or bring in more established developers as a partner.

"Post RERA (new real estate law), the company should benefit from smaller developers looking to tie up with prominent players to ensure better sales momentum and timely completion; the company’s strong track record of striking partnerships will help it in this regard," said a 6 November Edelweiss Research report on GPL.

Godrej Properties’ net profit nearly doubled year-on-year to Rs44.16 crore in the September quarter.

As the distress in the market deepens, GPL hopes to become even stronger. "Business development and expansion is ideal in tough market conditions," Godrej said.

Godrej Projects

Call:- 9168296060

http://www.godrejprojects.in

About the Author

3B Consulting Pvt Ltd is a professionally managed advisory company specializing in real estate services. Initiated by four financial and real estate experts with profound knowledge and cumulative experience of 34 Years in the field of banking.

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Author: Manish Mishra

Manish Mishra

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India

Member since: Dec 22, 2017
Total live articles: 31

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