Godrej Properties Share construction & contracting real estate

Godrej Properties Ltd (updated - 20 Jan 2012)
Godrej Properties, the real estate arm of the Godrej group, reported an encouraging performance for the quarter to December at a time when the going has been tough for realty firms.

On a quarter-on-quarter basis, the company has posted a 9.5% growth in net sales and 20.5% rise in net profit. The part proceeds of Rs 18.3 crore from shares sale of 49% in one of its subsidiaries in the December quarter boosted its net profit. At an operating level, margins for the December quarter were 18% - 420 bps lower than the previous quarter. The operational performance was impacted due to cost of sales and administrative expenses growing at a higher rate than the growth in net sales for the quarter.

The company has not made any progress in terms of area booked (on a quarter-on-quarter). Around 0.52 million square feet area was booked in the December quarter against 0.57 million square feet in the preceding September quarter. However, the booking value during the quarter has been higher at Rs 349 crore compared to Rs 214.4 crore in the earlier quarter.

Godrej Properties now has over 30 projects in 12 cities across India. It was among the few real estate companies which managed to launch new projects during the December quarter with three new projects in Pune, Bangalore and Mumbai. The income from the company’s Garden City project in Ahmedabad registered a 34% jump compared to the previous quarter.

The project accounted for almost half of the company’s total income for the December quarter. However, the company’s debt rose from Rs 1,152 crore in the September quarter to over Rs 1,900 crore at the end of the December quarter.

Going ahead, investors need to watch out for the company’s Ahmedabad projects and also its ambitious project in Vikhroli in partnership with Godrej & Boyce.

The promoters hold a 83.7% stake in the company. With equity dilution planned over the next six months, the company aims to reduce its existing leverage with the funds so raised. Investors may need to wait for the tide to turn on the economic front for a better show.
Source - Economic Times

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