Godrej Properties- Improving Micro Market Selection; High Value Additions At Attractive Pricing: Dolat Capital

Dolat Capital Report

Godrej Properties Ltd. has added eight new projects (year-to-date FY23); translating into gross development of Rs 165 billion and more than 95% is coming from 100% owned projects.

New business development activity in FY23 is offering evidence of consistency in prudent micro market selection. Also, we see capital discipline in parts as showcased in two new land purchases (Mumbai Metropolitan Region – Kandivali and Noida – Sector 146) following Q2 FY23.

Notably the cost of land as a percentage of GDV for these acquisitions (accounting for more than 60% of new business development activity in FY23 by GDV) came in at an attractive range of 10- 12%.

A combination of the three –

1. strong micro market selection,

2. low land cost and

3. higher economic share are key for improving cashflow and margin profile.

We view Godrej Properties’ new additions this year is ticking multiple boxes consistently; indicating a strategic shift to maximise cashflows versus topline alone.

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