Godrej Properties Q2 Results: Lackluster sales volumes overshadow guidance commentary

Real estate developer Godrej Properties Ltd. said in its second quarter investor presentation that it will surpass its annual collection guidance of ₹24,000 crore for the current financial year, after having reported the highest-ever collections in the second quarter and the first half of the year.

During the second quarter, Godrej Properties' collections grew by 31% from last year and 22% sequentially to ₹5,318 crore, taking the total figure for the first half of the year to ₹9,666 crore. The company has projected collections for the second half to be ₹15,000 crore, which will take it past the annual guidance for the year.

The company's operating cash flow during the September quarter grew 297% on a sequential basis and 33% from last year to ₹1,584 crore, taking the total figure for the first half of the year to ₹1,983 crore. Godrej Properties expects this figure to be around ₹7,000 crore in the second half, ensuring that the company stays free cash flow positive in the second half.

Area sold during the quarter stood at 6.2 million square feet, a 13% decline from the 7.1 million square feet it sold during the same quarter last year. Booking value also dropped by 6% year-on-year to ₹8,008 crore.

Godrej Properties expects booking to be between ₹22,500 crore to ₹25,000 crore in the second half, on the back of new launches and continued momentum in sustenance sales. The company expects to end the year with 15% to 20% growth in bookings, taking the five-year Compounded Annual Growth Rate (CAGR) to be between 38% to 40%.

The company is expecting to benefit from a very strong pipeline of projects in Bandra, Sector 63-A in Gurugram, Thane Uniabex, Vikhroli, Noida DMIC, Neopolic, Kharadi 2, Mahalunge, Vastrapur, as well as new phases of several projects in the pipeline. Sustenance sales contributed to 63% of the overall bookings during the second quarter.

For the September quarter, Godrej Properties' net profit fell 62% from last year to ₹154 crore from ₹405 crore last year, which can be attributed to a 47% fall in other income to ₹636.6 crore.

The company's revenue stood at ₹1,935 crore from ₹740 crore last year, while its EBITDA loss remained nearly the same at ₹469 crore from a ₹513 crore loss last year.

Shares of Godrej Properties are trading 5.5% lower on Friday after the earnings announcement at ₹1,478.4. The stock is nearing its 52-week low of ₹1,434, having declined 27% so far this year.