Target: ₹3,800

CMP: ₹2,616.15

In our recent interaction, Godrej Properties’ management reiterated that it remains confident of surpassing the FY25 pre-sales guidance of ₹27,000 crore. The recent capital raise will enable the company to maintain a high growth trajectory for at least the next two years.

It aims to replicate NCR’s success across markets and clock pre-sales of over ₹10,000 crore in all the four zones over the next two years. A lot of impetus is also on profitability and hence – despite the availability of capital – the management wants to be disciplined on project addition and arrest land cost at 12-20 per cent of GDV.

Before the recent capital raise, we expected the net debt to increase to ₹7,000 crore in FY25 from ₹5,900 crore in FY24 as net outflows on land were expected to be higher than OCF. However, the recent ₹6,000 crore capital raise will take care of the large part of new land investments over the next 1-1.5 years, thereby arresting the increase in net debt/ leverage.

We expect absolute net debt to remain below FY24 levels as internal accruals will be sufficient to fund the land investment beyond FY26.

We raise our FY25/ FY26 pre-sales estimate by 7/12 per cent as we incorporate recent project additions.