Godrej Properties (GPL) logged its most effective-ever pre-sales in Q4FY21/FY21 with bookings at Rs 26.3/67.3 bn, up 10% y-o-y/14% y-o-y. The business launched seven projects in Q4FY21 (11 in FY21). Collections totalling Rs 20.4 bn in Q4FY21 are also the highest-ever, but ~Rs 4.8 bn of capex led to net money outflow. Management expects pre-sales to develop in FY22 in spite of the pandemic.
We think GPL is nicely placed to advantage from the revival in housing demand and business consolidation. Factoring in the current QIP, we are tweaking the target price tag to Rs 1,526 (from Rs 1,544) though rolling forward the valuation to September 2022e.
Bookings rise as launches choose up: GPL clocked new sales of ~Rs 26.3 bn (up 10% y-o-y, 77% q-o-q) in Q4FY21 aided by seven project launches for the duration of the quarter (contributed 58% to bookings). FY21 pre-sales came in at Rs 67.3 bn (up 14% y-o-y). New launches contributed about a third of the pre-sales for the duration of the year. Project launches for the duration of FY21 stood at 11 (17 in FY20). The business has a healthier launch pipeline of ~12.3msf for FY22. We think the pandemic will effect sales velocity in the close to term, but anticipate recovery in H2FY22.
Collections increase fund-raising fortifies balance sheet: Collections enhanced to Rs 20.4 bn in Q4 (Rs 12.6 bn in Q3FY21) operating money flow rose to Rs 7.9 bn (Rs 4.5 bn in Q3FY21). Aided by QIP proceeds of ~Rs 37 bn, the business ended FY21 with a net money position of Rs 5.8 bn (net debt of Rs 30.8 bn in Q3FY21) net debt to equity stands at unfavorable .1x.
Outlook: Healthy lengthy-term prospects– We think launches and sales trajectory will be crucial stock catalysts. We develop in current QIP and keep ‘BUY/SO’.