June quarter saw highest ever residential sales with booking value of Rs 1,472 crore
Godrej Properties recorded “best ever” residential sales in this fiscal’s first quarter with a booking value of Rs 1,472 crore. However, the company expects short-term challenges due to recent Real Estate (Regulation and Development) Act.
During June quarter, the area sold was 17,99,678 square feet as against 5,92,715 sq ft during the corresponding period last fiscal worth Rs 387 crore. In the preceding quarter (Q4 FY17), booking value of Rs 340 crore or 5,89,169 sq ft was booked by the company.
“The first quarter being Godrej Properties best ever quarter in the company’s history in terms of residential sales and sold apartments worth nearly Rs 1,500 crore. It’s an ideal environment, particularly in the market which is going through some challenges. This has been the quarter with the implementation of real estate regulatory Act as well as the goods and services tax,” said Pirojsha Godrej, executive chairman, Godrej Properties.
In the quarter ending June, the highest sale in terms of area was witnessed for its Godrej 24 project in Pune at at 6,02,358 sq ft or Rs 358 crore, followed by National Capital Region’s Godrej Golf Links at 3,50,615 sq ft (Rs 209 crore). If booking value is compared, the highest was recorded for The Trees project in Mumbai’s Vikhroli area at Rs 434 crore, for which the booking area stood at 2,10,676 sq ft. This is primarily due to high realty prices in Mumbai.
Post-announcement of the result, the company mentioned that “launch timings are dependent on receipt of regulatory approvals and can be delayed substantially beyond initial expectations”.
However, at the same time, it claimed that all their new launches planned are on track. Godrej Properties is planning to launch new projects in National Capital Region, Bengaluru, Mumbai, Pune, Kolkata and Ahmedabad.
“We are at an exciting stage right now for the industry. While short-term market conditions are quite challenging, we think that presents us with a lot of opportunity because there are opportunities to add to our business development momentum. Our own expectation is that while the market is currently weak, we see a lot of cause for optimism for the next few years,” he mentioned.
The optimism is in the backdrop of “affordability” for residential segment as the real estate prices have been flat combined with rising income and reducing interest rates, Godrej added.
Despite highest ever residential sales, and a higher income of Rs 345 crore in Q1FY18 as against Rs 335 crore in Q1FY17, the net profit witnessed a 46% fall at Rs 23 crore compared to Rs 43 crore in the year-ago period.
The topline fell on account of marketing costs incurred for four new project launches and cost escalation seen in a couple of projects.
Net debt of the company, too, has come down from Rs 3,499 crore as on March 31, 2017 to Rs 3,091 crore during the quarter ending June 2017.
On the other hand, in its annual general meeting held on Wednesday, the company increased the borrowing limit, which Godrej termed it as “statutory flexibility” for the huge opportunity in store to expand its portfolio in the months to come.
Meanwhile, construction of Taj Hotels at Vikhroli, Mumbai will commence only during next financial year as currently Godrej Properties is in the process to set up the project and looking at having design partners.
...& ANALYSIS
- During June quarter, the area sold was 17,99,678 square feet as against 5,92,715 sq ft a year ago
- The company plans to launch new projects in NCR, Bengaluru, Mumbai, Pune, Kolkata, Ahmedabad
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