Main realty agency Godrej Properties is nicely positioned to keep up its development momentum this fiscal regardless of headwinds as a result of Covid-19 pandemic, and can look to extend market share in addition to add initiatives accessible at a distressed valuation, a high firm official mentioned.
In his message to the corporate’s shareholders within the annual report, Godrej Properties Govt Chairman Pirojsha Godrej mentioned the housing demand will definitely be impacted as a result of financial slowdown attributable to the pandemic.
Nonetheless, he mentioned the demand from potential homebuyers will additional consolidate in direction of giant organised builders with higher observe report in execution.
Furthermore, Godrej mentioned the affordability has elevated as a consequence of low rates of interest and steady costs over the previous seven years. House possession would additionally achieve forex as a consequence of lockdown.
Godrej Properties achieved a gross sales reserving of Rs 5,915 crore over the last fiscal, the very best by any listed actual property developer.
“Whereas we’re happy with the 12 months passed by, it’s clear that the present 12 months will deliver new challenges and alternatives. Resilience and agility might be essential to make sure that we emerge stronger from this disaster,” mentioned Pirojsha.
The financial development is more likely to be in detrimental throughout the present monetary 12 months and the Covid-19 disaster is resulting in vital quantities of job cuts and wage discount, he mentioned including that this would definitely affect demand for high-value purchases reminiscent of housing.
“Regardless of these headwinds, we imagine we’re nicely positioned to keep up our development momentum within the present monetary 12 months… We’re ready to resist a attainable downturn within the sector — nevertheless dangerous it will get,” mentioned Pirojsha.
The Godrej Properties chairman mentioned the corporate would give attention to capturing alternatives that may come up because of this disaster.
“Crucial alternative might be to achieve market share. Our sturdy enterprise improvement over the previous few years has ensured that our launch pipeline is the perfect it has ever been. We might be agile and able to launch these initiatives and thereby achieve share whereas most of our friends are centered on liquidating their present stock,” he mentioned.
The brand new launches of initiatives would drive money flows and earnings development over the medium time period.
“We might be open to the chance to additional strengthen our portfolio if initiatives turn out to be accessible at distressed valuations,” mentioned Pirojsha.
He mentioned the corporate stays dedicated to medium-term targets — to constantly be among the many main builders by worth of residential actual property gross sales in core markets, and to constantly ship a return on fairness (ROE) in extra of 20 per cent.
“Regardless of continued disruptions the true property sector has confronted together with the present pandemic, we imagine we’re on observe to realize these targets,” Pirojsha mentioned.
The corporate’s gross sales bookings in 2019-20 grew 11 per cent to Rs 5,915 crore, and resulted from the sale of seven,415 properties with a complete space of 8.8 million sq ft. This averages to over 20 properties per day.
“We bought greater than 1.1 million sq ft with a reserving worth of over Rs 1,000 crore in every of our 4 focus markets of MMR (Mumbai Metropolitan Area), Pune, NCR and Bengaluru,” Pirojsha mentioned.
On execution of initiatives, he mentioned the corporate’s technique to shift from labour-intensive types of building to precast building would assist scale back project-completion timelines.
This can even scale back the hole between working outcomes and reported accounts, improve undertaking returns, and allow sooner turnaround of capital.
“Our stability sheet is powerful with web debt to fairness on the finish of This autumn FY20 standing at 0.24 to 1. Our fairness elevate of Rs 2,100 crore in Q1 FY20 has ensured that we’ve got a major surplus liquidity to resist any short-term liquidity and demand shocks that will come up,” Pirojsha mentioned.
Godrej Properties, the true property arm of the Godrej group, posted a web revenue of Rs 267.21 crore over a complete income of Rs 2,914.59 crore over the last monetary 12 months.