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Informist, Friday, Jul 19, 2024

MUMBAI – Strong pre-sales aided by robust demand for recent launches and high deliveries are likely to help Godrej Properties Ltd report year-on–year growth in consolidated net profit for the June quarter. The Mumbai-based property developer garnered robust demand for key projects launched recently in the National Capital Region and Bengaluru.

The Godrej Industries-owned real estate developer's consolidated net profit for Apr-Jun is seen in the range of 1.91 bln rupees to 2.21 bln rupees, according to the estimates of three brokerage firms. The highest bottom-line estimate for the quarter is of HDFC Securities, while the lowest is of Motilal Oswal Financial Services. In the June quarter a year ago, the company had reported a consolidated net profit of 1.25 bln rupees, and for the previous quarter the figure was 4.71 bln rupees.

The revenue from operations is expected to be in the range of 4.66 bln rupees to 9.49 bln rupees. The topline reported in the year-ago period was 9.36 bln rupees and that for Jan-Mar was 14.26 bln rupees. The company will likely report modest revenue recognition on account of low project completions during Apr-Jun, Kotak Institutional Equities said in its pre-earnings report.

Besides the three brokerage reports, estimates by Nuvama Wealth Management were an outlier. The brokerage firm see bottomline for the June quarter at 9.01 bln rupees and topline at 28.39 bln rupees.

"The company had another strong quarter of launches, which included one large project at NCR (National Capital Region) and Bengaluru, along with a new tower launch at a few ongoing projects," Motilal Oswal Financial Services said in a report. The encouraging response for new projects combined with steady sustenance sales can help the company's pre-sales rise four times on year to 85 bln rupees, the brokerage said. These factors also helped the company outperform sectoral peers during the quarter, the brokerage said. HDFC Securities also said that the company reported robust demand for recent launches in Bengaluru and Noida.

Kotak Institutional Equities expects healthy pre-sales across key real estate players despite the first quarter typically being a seasonally weaker quarter. In the case of Godrej Properties, the brokerage expects strong pre-sales of around 75 bln rupees aided by sold-out launches in Bengaluru and Noida, as well as new launches in Gurgaon, Pune, and Mumbai. Of these, 31 bln rupees through pre-sales is expected from the company's launches in Bengaluru and 20 bln rupees through pre-sales in Noida.

The company's deliveries are expected to be high during the June quarter, Nuvama Wealth Management said in a report. Godrej Properties would also benefit from strong housing sales in Mumbai, the brokerage said.

The company's earnings before interest, tax, depreciation and amortisation is seen at 130 mln rupees, according to HDFC Securities. Nuvama Wealth Management expects EBITDA to be 5.82 bln rupees, while Kotak Institutional Equities expects a loss at the operating level with EBIDTA loss of 1.42 bln rupees.

Godrej Properties is scheduled to declare its Apr-Jun earnings on Jul 31. Today, shares of the company ended 3.5% lower at 3,245.75 rupees on the National Stock Exchange.

Following are the Apr-Jun estimates for Godrej Properties, in mln rupees, based on reports from four brokerages:

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Edited by Ashish Shirke

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