Godrej Properties’ (GPL) new launches have picked up in the second quarter, which should really enable drive a robust quarter-on-quarter (QoQ) pickup in sales. News flow on the capital deployment has however to come by way of, even though competitors for massive offers is nonetheless low and GPL’s financing capacity is amongst the most effective.
We think GPL’s robust positioning (Top-4 in Bangalore, Pune, NCR) would provide it great leverage to the housing cycle uptick. We reiterate Buy with a target value of Rs 1,974.
GPL’s new launches (6.9m sf) have substantially trailed sales (11.6m sf) major to depleted inventory and consequently weaker sales in Q1. The management had guided for new launches resumption from Q2. Our channel checks recommend GPL’s launch momentum has certainly picked up with new launches completed across the 4 important micro-markets in Q2.
Per our checks, the projects launched include things like — Ananda, Bangalore (.7m sf) Hill-Retreat, Pune (.5m sf) Woods Phase-2, Noida (.8m sf) and new tower releases in City, Panvel, and so forth.
GPL had currently highlighted enhanced sales momentum with July sales at Rs 490 crore (98% of Q1) and consequent expectations of a robust Q2. As new launches come by way of, we think, the July momentum has most likely sustained.
Overall, for FY22, GPL has a 13.3m sf new launch pipeline and if 8-10m sf of the exact same gets launched (~60-75% of target), pre-sales could rise in double digits in FY22. The demand remains robust across markets and as such new launches are most likely to see higher sell-thru prices.
Strong rankings in major metros provide gearing to the up-cycle. The current excitement about tech/startup boom (hyperlink) driving housing sales in tech-driven cities or our belief (hyperlink) of NCR getting amongst cyclically most effective-placed marketplace could effectively be played by way of GPL.