Shares of Godrej Properties jumped more than 8 percent in early trade on BSE on April 10 after the company announced it had its best-ever quarter for sales bookings, cash collections, and project deliveries.
In a BSE filing on April 10, the company said its Q4FY23 bookings stood at ₹4,051 crore and FY23 booking value grew by 56 percent to ₹12,232 crore.
Sales volumes for the quarter grew by 19 percent quarter-on-quarter (QoQ) in area terms from 4.42 million sq. ft. to 5.25 million sq. ft. Sales volumes for the full financial year grew by 40 percent in area terms from 10.84 million sq. ft. to 15.21 million sq. ft.
The company's cash collections for FY23 grew 41 percent to ₹8,991 crore. Q4FY23 collections stood at ₹3,822 crore, representing QoQ growth of 127 percent and YoY (year-on-year) growth of 52 percent, said the BSE filing.
The company also claimed it saw its highest-ever quarterly and annual project deliveries in Q4 and FY23. As per the BSE filing, the company delivered projects aggregating over 10 million sq. ft. across five cities in FY23 including 7.6 million sq. ft. in Q4.
The company added 18 new projects in FY23 with a total estimated saleable area of nearly 29 million sq. ft. and a total estimated booking value of about ₹32,000 crore which, as per the company, was more than double the business development guidance of ₹15,000 crore of estimated booking value for FY23. This included 5 new projects with an expected booking value of 5,750 crore in Q4.
The stock hit its 52-week high of ₹1,704.90 on BSE on April 11, 2022. As of April 6 close, the stock is down 34 percent from that level.
In the last one year, the stock has significantly underperformed its sectoral index BSE Realty.
However, now some brokerage firms believe this stock can give healthy returns in the medium to long term.
Brokerage firm Motilal Oswal Financial Services has upgraded the stock to a 'buy' with a SOTP-based target price of ₹1,575, implying a 40 percent upside potential.
"We raise our FY24E and FY25E pre-sales by 23 percent and 44 percent, respectively, as we incorporate recent project additions. With another expected strong year of project additions in FY24, we believe the company is on track to achieve its pre-sales target of ₹200b by FY26," said Motilal Oswal.
The brokerage firm has revised its FY25 revenue and PAT estimates by 23 percent and 10 percent as it updated the project completion timelines for recently added projects.
"While the company continues to provide strong visibility on pre-sales growth with a pick-up in business development activity, stock performance continues to remain muted, which reflects a concern on profitability. However, with expected improvement in delivery and profitability from 4QFY23, we believe the re-rating triggers are imminent," said the brokerage firm.
The brokerage firm, however, said a slowdown in residential absorption, an inability to deliver profitability as anticipated, and a delay in launching new projects, impacting sales growth adversely, are the key downside risks to its target price.
The stock looks attractive for the short term too.
Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, pointed out that this realty stock is in strong buzz and the stock is showing bottoming out signs. Bhosale expects ₹1,250 in the near term with immediate support at ₹1,140.
According to a MintGenie poll, 19 analysts on an average have a ‘hold’ call on the stock.
Disclaimer: The views and recommendations given in this article are those of individual analysts and broking firms. These do not represent the views of MintGenie.