Godrej Properties shares hit 52-week high; surge 150% in one year

Shares of Godrej Properties surged over 3% to hit a fresh 52-week high on Monday after the Godrej Group company announced plans to develop a township project in Bengaluru. The share price of the real estate major has risen more than 150% in less than a year, from its 52-week low of ₹1,005.70 on March 29, 2023, to ₹2,524 intraday today.

Early today, Godrej Properties shares opened higher for the fourth straight session at ₹2,486.95, up 1.9% against the previous closing price of ₹2,439.50 on the BSE. In the first hour of trade so far, the realty heavyweight rose as much as 3.5% to touch a new 52-week high of ₹2,524, while the market capitalisation increased to over ₹68,800 crore. In the calendar year 2024, the stock gained 24%, while it climbed 50% in six months, and 6.5% in a month.

Godrej Properties (GPL) in an exchange filing today said that it has entered into definitive agreements to develop a large township project in North Bengaluru under a profit-sharing model. The estimated booking value from the project is expected to be ₹5,000 crore.

Spread across 62 acres, the land is located in a prime area of North Bengaluru. The project will offer 5.6 million square feet of saleable area comprising primarily premium residential apartments of various configurations.

“The project will cater to the aspirations of customers who are looking for a high-quality living experience with modern amenities and design with outstanding connectivity,” the release notes.

Gaurav Pandey, MD & CEO, Godrej Properties says, “We are excited with the opportunity to develop a large scale project in a strategic location in Bengaluru. We will aim to build an outstanding residential community that creates long-term value for its residents.”

The release states that while an agreement for sale for land including this 62 acres was entered into by GPL in 2014, the development wasn’t able to commence at the time. Over the past few months, the 62 acres development opportunity has crystallised, and GPL now expects to launch the first phase of development on this land in the upcoming financial year.

Last month, ICRA reaffirms credit rating for bank facilities of Godrej Properties at [ICRA]AA+/[ICRA]A1+ with "stable" outlook, citing strong operating performance in the current fiscal as reflected by healthy growth in sales, collections, and cash flow from operations (CFO). As of December 2023, the company had free cash and liquid investments of ₹2,837 crore, with a major portion of the same earmarked for growth and investments.

“The same is expected to sustain in Q4 FY2024 and FY2025, driven by robust project launch pipeline, likely healthy sales velocity in the upcoming launches, backed by continued end-user demand,” it said in a report.

In 9M FY24, GPL’s sales increased by 59% YoY to ₹13,008 crore and collections by 19% to ₹7,185 crore, aided by new launches and healthy progress in the ongoing projects. Consequently, the cash flow from operations increased by 48% in 9M FY24.

ICRA estimated the collections to remain healthy by more than ₹10,000 crore in FY24 and grow by 12-14% in FY25.

The rating agency in its report, says that the company’s consolidated gross debt is estimated to increase to ₹11,000 crore by March 2024 from ₹6,412 crore as of March 2023 due to the expected land/approval-related investments of around ₹6,700 crore in FY24 (₹4,214 crore in 9M FY24). 

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)