Godrej Properties shares rise 2% as Jefferies says 'buy', sees 35% upside- Grow Mudra

Godrej Properties shares rise 2% as Jefferies says 'buy', sees 35% upside

10 Dec , 2024 By : Debdeep Gupta

Mumbai-based real estate major Godrej Properties rose over 2 percent to Rs 2,905 in morning trade on December 10 after Jefferies issued a 'buy' recommendation on the stock and raised the target price, citing robust growth prospects in the coming quarters.

With a price target of Rs 3,850, the international brokerage forecasts an upside potential of over 35 percent from the last closing price of Rs 2,843 on the National Stock Exchange. The Godrej Properties stock has gained over 40 percent since the start of the year, comfortably outpacing Nifty's gain of 13 percent over the same duration.

Analysts believe that over the past four years, the company's acquired projects have delivered an 8x return on acquisition costs, with sales quadrupling. The pivot to owned land and a recent equity raise is expected to bolster growth and cash flow.

For FY25, pre-sales growth is projected at 35 percent, driven by strong launches in the year's second half, building on robust first-half performance. At 17x price-to-earnings on FY25 pre-sales, the stock is poised for multiple expansions alongside improvements in profitability and operating cash flow, Jefferies added.

In the second quarter, Godrej Properties managed to achieve half of its financial year 2025 booking guidance of Rs 27,000 crore at the end of the year's first half. Cash collections stood at Rs 7,017 crore at the end of the September quarter, accounting for 47 percent of the company’s full-year guidance of Rs 15,000 crore. This marks the highest collections recorded by the company for both the September quarter and the first half of the year.

The company reported a consolidated net profit of Rs 335 crore for the September quarter, compared to Rs 67 crore in the same quarter last year. The net profit was aided by a tax write-back of Rs 169 crore. Revenue for the quarter stood at Rs 1,093 crore from Rs 343 crore in the year-ago quarter.

At about 9:20 am, shares of the company were trading at Rs 2,890, higher by 1.6 percent from the last close on the NSE.