Shares of Godrej Properties, one of India’s leading real estate developers, soared 2.41% to ₹1,576 apiece during early trade on Monday. This uptick in shares came after the company today announced that it has sold 670 homes worth over ₹2,000 crore in its project, Godrej Tropical Isle, located in Sector 146, Noida.
"This is company's most successful ever launch in terms of the value and volume of sales achieved. The project was launched in August 2023, within nine months of the purchase of land, through an e-auction conducted by the Noida Authority in November 2022," the company said in a regulatory filing.
Mr. Gaurav Pandey, MD & CEO, Godrej Properties, said, “We are delighted with the response to our project, Godrej Tropical Isle. We’d like to take this opportunity to sincerely thank our customers who have reposed their faith in Godrej Properties. We will do our best to ensure that Godrej Tropical Isle offers its residents an outstanding living experience. Noida is an extremely important market for Godrej Properties, and we will look to further strengthen our presence in the years ahead.”
Godrej Properties Limited is the real estate development arm of the Godrej Group, which was started in 1897 and is today one of India’s most successful conglomerates. The company's shares over the last six months have gained 42%, and are up by 23% in the last 1 year and 168% in the last five years.
The union budget presented this year was supportive of the long-term growth of the real estate sector in India through its focus on urban infrastructure and the digital economy.
The government allocated ₹79,000 crore, 66% higher than last year’s allocation, under the Pradhan Mantri Awas Yojna (PMAY) initiative, which will be used for both urban and rural markets. The government plans to complete its target of over 4 crore houses across both urban and rural markets, which will be allocated to persons eligible under the scheme. In addition, it plans to make the land and construction approval process more efficient.
In the face of significant interest rate hikes totaling 250 basis points (bps) within the past 12 months, the real estate industry has impressively sustained its momentum. Fiscal year 2022–23 emerged as a record-setting period for the sector, marked by the highest-ever sales bookings. This resilience underscores the willingness of prospective homebuyers to accept high single-digit mortgage rates, the company said in its FY23 annual report.
During FY 2022–23, Godrej Properties achieved its highest-ever sales, both in terms of the value and volume of real estate sold, with 15.2 million square feet amounting to a booking value of ₹12,232 crore sold, representing a substantial year-on-year growth of 56%.
“Notably, sales performance was evenly distributed across our four key geographies, with each region contributing more than 2 million square feet of sales and a sales value exceeding ₹2,000 crore in all four of our focus markets,” the company said.
Looking ahead to FY23–24, Godrej Properties remains confident in maintaining its healthy sales momentum. It cites a solid structural foundation, sustained demand, and relatively affordable housing loan rates, despite some increases. In this context, financially robust and reputable developers with exceptional execution capabilities are poised to benefit significantly from the ongoing cyclical upturn.
However, it's important to note that interest rate hikes implemented to control inflation may heighten the cost of capital, potentially impacting weaker industry players while favoring well-capitalised developers like GPL, the company added.
19 analysts polled by MintGenie on average have a 'hold' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.