Godrej Properties Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : Yeah, thank you so much and congratulations on great numbers here. My first question is it looks very, very likely that you will exceed your booking value guidance. What should we assume that you'll be aiming for in FY26?

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : Okay. And secondly, in terms of pricing, what are the trends that you're seeing in terms of pricing growth in your market? And given the realization that you've discovered, how high are they on an average compared to the pricing that you would have underwritten it?

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : And in terms of compared to the prices at which you have underwritten, how high are the realizations?

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : Understood. And secondly, on the construction cash flow side, while your collections have gone up, construction outflow hasn't really gone up as much. Should we assume a significant bump up coming in the second half of this fiscal?

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : Right. Understood. That's helpful. And lastly, if you can share the -- your share of sales booking value in the overall pre sales,

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : 93%. Okay, that's helpful. Thank you so much and all the best.

Question: Mohit Agrawal - IIFL Securities - Analyst : Yeah, thanks for the opportunity and congratulations on great set of numbers. So firstly, if you could touch base on the launch side, you've already done nearly 50% of your guidance. So -- and typically second half is stronger just like presales. So if you could, kind of, tell us how do you see the second half and would you beat your guidance there as well? And what would be the big projects that you are looking at in the second half?

Question: Mohit Agrawal - IIFL Securities - Analyst : So Pirojsha, Worli would be 3Q or 4Q, if you could specify?

Question: Mohit Agrawal - IIFL Securities - Analyst : Quarter four. My second question is on you've been acquiring land and that strategy has been working well. And it is imperative for us to replenish the sales and to grow. But assuming that, land prices have gone sharply up and probably we are somewhere near the peak, let's say, what kind of margin of safety do you want to build in your future land acquisitions in terms of margins? If could kind of elaborate that strategy because if let's say the pricing growth stands or kind of declines, what kind of margin of safety do we have when we are underwriting the project?

Question: Mohit Agrawal - IIFL Securities - Analyst : Perfect. That's clear. Just one last question, you've done INR17,000 crore kind of a BD if I include the post second quarter acquisitions as well. What would be the total land spend on that and how much of that land payment would be pending, which would come in future quarters?

Question: Mohit Agrawal - IIFL Securities - Analyst : This is the pending land payment, sir?

Question: Mohit Agrawal - IIFL Securities - Analyst : And sir, what would be the total land spend that would be in the range of 15% to 20%?

Question: Mohit Agrawal - IIFL Securities - Analyst : Okay. Thank you, sir. That's all from my side.

Question: Praveen Choudhary - Morgan Stanley - Analyst : Thank you so much. And congratulations, very, very exceptional numbers up there. I just wanted to get a sense of any overheating you're seeing in the market and all of you went through the entire spectrum of pricing trends. It seems like everything is comfortable. But to the extent that what are you looking for in terms of any overheating or concerns in the market, either in the land price or in the final sale conditions? That will be helpful, thank you.

Question: Praveen Choudhary - Morgan Stanley - Analyst : Very, very clear. Thank you so much. And then one last question for me would be when I look at the annual sale in terms of GFA versus the land bank that you have, and I assume, let's say 20% growth per annum, you may have five years' worth of land bank. Is that the right way to think about it when you're going to use your cash to replenish the land bank or do you want to have a longer land bank or a shorter land bank? Just wanted to get that sense. Thank you

Question: Praveen Choudhary - Morgan Stanley - Analyst : Understood. Thank you, Pirojsha. And again, congratulations, very, very strong result.

Question: Pritesh Sheth - Axis Capital Limited - Analyst : Yeah, thanks for the opportunity and congrats on great set of numbers. Firstly, again on the the market environment on the absorption side, since you have had like a couple of successful launches this quarter, how you read that? What is -- what it was probably six months or a year back when -- where projects were literally getting sold out during launch? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2024 / 11:00AM, GODR.NS - Q2 2025 Godrej Properties Ltd Earnings Call We still have a healthy absorption rate of 60%, 80% inventory getting sold out. But how you read that? Is It a general supply side which is creating that kind of absorption run rate? Or you think that certain ticket sizes are going a bit higher, and hence we are seeing some bit of cooling off in terms of fund sale. So just a comment on that?

Question: Pritesh Sheth - Axis Capital Limited - Analyst : Sure. And secondly, on the approval side of the business, have things started to recover in terms of timelines that used to take in terms of getting approvals? Because it's between like post elections, we saw some bit of slowdown, but have things picked up from there on or it's still as normal as it was before the elections?

Question: Pritesh Sheth - Axis Capital Limited - Analyst : Sure. Got it. And just lastly, on the capital raise in terms of deployment, how much time you will take to deploy that? And second, while we probably reach INR30,000 crore-plus pre sales, what kind of market wise target do we internally sense, that we can generate for all our individual markets like NCR, we were at INR10,000 crore last year. Do we have -- are we working on some market wise targets for other key markets of ours. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2024 / 11:00AM, GODR.NS - Q2 2025 Godrej Properties Ltd Earnings Call

Question: Pritesh Sheth - Axis Capital Limited - Analyst : Sure. That's helpful. That's it from my side and all the best.

Question: Abhinav Sinha - Jefferies - Analyst : Hi. So congratulations to the team on strong numbers. First question is on, with the future pipeline of new projects that we're looking at, are we targeting the same sort of micro markets and the overall market or you are looking to expand into newer cities?

Question: Abhinav Sinha - Jefferies - Analyst : Right. Secondly on, I also see that some of your commercial investments have sort of reached the maturity level, any thoughts on how we monetize that or you're looking to sort of hold on to those assets?

Question: Abhinav Sinha - Jefferies - Analyst : Right. And one last question on cash flow. So we are seeing higher margins in the project and also higher take rates which are now, north of 90%. So our sort [Op-CF] percentage cash flow, which is now around, I think around 35%-odd. Where does it settle in a couple of years?

Question: Abhinav Sinha - Jefferies - Analyst : Okay, thanks and all the best.

Question: Parikshit Kandpal - HDFC Securities - Analyst : Yeah. Hi, team. Congratulations on a great quarter. So my question is on the launches. So if you can help us understand, when is the Ashok Vihar launch now? And also, if you can give some more color on the Vikhroli lands parcel after the family settlement, how do we see it, whether new launches will happen there and what are the timelines of launches for Vikhroli land parcel?

Question: Parikshit Kandpal - HDFC Securities - Analyst : Okay. The second question is on the fund raise which you have taken the resolution. So if I see the MMR portfolio, so last year sales which we had done, the average realisation of about [16,000, maybe on carpet 24,000, 25,000]. So we are really not there on the premium end of the MMR which is really large and where the brand GPL can have a larger market share. So how do we intend to plug that gap on the premiumization of the MMR portfolio? Because that is what will give us bigger margin. So if you can give some more color on this fundraise, how do you intend to deploy it? Are you looking to underwrite large land parcel, some 50, 60 acres kind of land parcels, where we can have, maybe, 10, 11 year kind of development which can be premiumized. So if you can give some color on that, that would be helpful.

Question: Parikshit Kandpal - HDFC Securities - Analyst : Gaurav, my point was more from like larger land parcels which may come up for option of bidding. That's why some of the peers are raising large capital. So are we open to underwrite large like INR1,000 crore or INR1,500 crore kind of single land parcels? So which can give like a higher economic interest as well as long term development potential. Because it's hard to get land parcels, larger land parcels in Mumbai, there is limited window and since you're raising capital. So my question is more from.

Question: Parikshit Kandpal - HDFC Securities - Analyst : Yeah. So one question to Rajendra. So Rajendra, I mean, you touched upon the INR1,000 crore spending from the BD done in Q3 and INR1,500 crore for the rest of it. So entire land payment financial year-to-date for all the land parcel or pending land payments should be about INR2,500 crorep?

Question: Parikshit Kandpal - HDFC Securities - Analyst : Okay. And just last if I may, how's been the approvals in Bangalore? We've been hearing there has been significant delay in approvals in Bangalore. So if you can, Gaurav if you can touch upon that, whether the approvals are coming in or things are normalized now?

Question: Parikshit Kandpal - HDFC Securities - Analyst : Okay, thank you team. Thanks for the answers and we should --

Question: Kunal Lakhan - CLSA India Private Limited - Analyst : Yeah. Hi, good evening. Thanks for taking my question. Just on the fundraise. Currently your promoter stake is about about 50%-odd. And post this fundraise, it could go below 50% or 47%. So what's the long term view on maintaining the promoter stake at?

Question: Kunal Lakhan - CLSA India Private Limited - Analyst : Sure. And on the fundraise per se, right, you did answer on the utilization of these funds. But just wanted to understand in terms of the four markets that you spoke about, right? Just from your opening commentary, you sounded more positive in terms of pricing, I'm saying relatively in towards like, say Noida and Gurgaon versus Bangalore, Mumbai or Hyderabad. So should we assume that the incremental deployment of capital would be skewed towards markets like Noida and Gurgaon?

Question: Kunal Lakhan - CLSA India Private Limited - Analyst : Very well understood. Thanks so much. One last question is in terms of buyer profiles, especially for Gurgaon and Noida projects, if you can give some color on, what are the profile of the buyers and and how many of them typically take mortgages?

Question: Kunal Lakhan - CLSA India Private Limited - Analyst : Great. Thanks so much and all the best and a very happy Diwali to you all in advance. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2024 / 11:00AM, GODR.NS - Q2 2025 Godrej Properties Ltd Earnings Call

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : Yeah. Thanks so much for the follow up. So Pirojsha, this one is for you. Did I hear it right? You said that if you were only anticipating 20% growth from current levels, there wouldn't be a need for a fundraise?

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : So essentially with fundraise, we are targeting much higher, okay. Secondly, can you also give a sense of what kind of gross you've also added a significant amount of gross cash now, close to INR6,000 crore and there will be -- what part would be stuck under RERA? And when do you expect some of that to also unwind?

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : So you have large -- it's almost INR6,000 crore of cash in your books now. This has grown up significantly on Q on Q. How much of it is stuck under RERA? And when do you expect it to get unlocked?

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : (multiple speakers) Yeah and is there something in JVs as well which is still yet to come back to the books?

Question: Puneet Gulati - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : Okay, great. That's all from my side. Thank you so much.

Question: Sukant Garg - Equible Research Private Limited - Analyst : Hi. Hello, everyone. First of all, congrats on the numbers. I would like to ask that in how many projects that we missed the basically and how many projects out of the total we missed the original scheduled deadline?

Question: Sukant Garg - Equible Research Private Limited - Analyst : Yeah, sorry. So am I clear now? Am I hello?

Question: Sukant Garg - Equible Research Private Limited - Analyst : Okay. Hello. Am I clear now?

Question: Sukant Garg - Equible Research Private Limited - Analyst : Okay. So I just want to ask that in how many projects we missed the original schedule deadline? And what is the average time of that miss the average time of that? How much the delay of the deadline is? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2024 / 11:00AM, GODR.NS - Q2 2025 Godrej Properties Ltd Earnings Call

Question: Sukant Garg - Equible Research Private Limited - Analyst : Yes.

Question: Sukant Garg - Equible Research Private Limited - Analyst : So my question is about how many how, how many days of delay that we usually have in completing a project on an average?

Question: Sukant Garg - Equible Research Private Limited - Analyst : Okay. Thank you and happy Diwali to all of you. Thank you. Thank you much.