Godrej Properties is slated to generate the most profits among all of Godrej group companies within the next five to seven years.“One can predict this growth trajectory, given that in the past five years, the business grew 50 per cent annually,” said Adi Godrej, chairman of the group.
Godrej Properties’ initial public offering (IPO) was announced in December last year and was one of the few IPOs to have yielded a successful return, he claimed. Since the IPO, the company’s share prices had appreciated by 5.9 per cent.
“At present, the contribution of Godrej Properties to the overall Godrej Group portfolio by way of profits is about 10 per cent. Where the property business is concerned, while business profits for the top line are not that great, the profits for the bottom line are quite high,” he said. It has 30 ongoing projects across 11 cities. Three of these are in this city.
“Our focus where Godrej Properties is concerned remains on the construction of residential space, given the unprecedented demand for personal housing in the Rs 25-lakh bracket. Keeping this in mind, 80 per cent of our projects will be residential spaces — the rest will be commercial,” said Godrej.
Demand for commercial space in the Indian market emanates from hospitality, healthcare, retail and information technology, he said. Most hotels built under the Godrej brand would however become operational under other brand names, given the fact that the model of operations for Godrej Properties is to build and sell.
According to Godrej, “Our model of property development is based on outsourcing. We focus on our areas of expertise such as getting the projects, planning, marketing and sales. Even the responsibility for core process such as construction is outsourced to partners such as Larsen and Toubro.”
Soap prices to rise
Godrej Consumer Pvt Ltd (GCPL) is set to increase soap prices by three to five per cent because of the continuing rise in the cost of raw materials, said Godrej.
“We raised the prices for our hair colouring products recently, and now we are looking at increasing prices for the soap line, in the next month or two, primarily because of the rise in the prices of raw materials,” said the chairman.