Godrej Properties debt up 17% to Rs 6,174 cr to fund land acquisitions

Realty firm Godrej Properties net debt rose 17 per cent in the July-September quarter to Rs 6,174 crore mainly due to fund acquisition of land parcels.

According to its investors presentation, the net debt of Mumbai-based Godrej Properties stood at Rs 6,174 crore as on September 30, 2023. Its net debt was Rs 5,298 crore as on June 30, 2023 and Rs 3,649 crore at the end of the last fiscal.

Last month, Godrej Properties Executive Chairperson Pirojsha Godrej had said that the net debt has risen because of aggressive land acquisitions done by the company since last April.

Most of the land acquisition has been done outright which requires upfront payment, he had said.

However, Pirojsha Godrej maintained that the debt position is comfortable as the net debt-equity ratio is 0.65.

During the last financial year, Godrej Properties acquired multiple land parcels across various cities to develop housing projects that can generate a revenue of Rs 32,325 crore.

In the current fiscal, the company targets to acquire land parcels that can help generate revenue of Rs 15,000 crore. In the first six months, it has already added projects worth Rs 7,175 crore.

Pirojsha said the net debt might further rise in the next few quarters before stabilising.

On the operational front, Godrej Properties is confident to meet its target to sell properties worth Rs 14,000 crore this fiscal as it expects strong demand for its ongoing and upcoming housing projects.

Godrej Properties, the real estate arm of Godrej Group, had sold properties worth Rs 12,232 crore in the previous fiscal.

"We are confident of meeting the annual guidance of Rs 14,000 crore of sales bookings. Hopefully we can do better," he had said.

The company has achieved 48 per cent growth in its sales bookings to Rs 7,288 crore during April-September period of 2023-24 fiscal from Rs 4,929 crore in the year-ago period.

The company has an aggressive launch pipeline in the second half of this fiscal in four focus markets -- Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune and Bengaluru.

Out of the total sales booking of Rs 7,288 crore in the first six months of this fiscal, the Delhi-NCR market contributed sales of Rs 3,186 crore.

In the first half of this fiscal, the company gave deliveries of 6.5 million square feet area. It is confident of meeting the guidance of 12.5 million square feet of deliveries this fiscal.

During the 2022-23 fiscal, Godrej Properties had seen 10.47 million square feet area of deliveries.

On the financial front, Godrej Properties has recently reported a 22 per cent rise in its consolidated net profit to Rs 66.80 crore during the July-September quarter of this fiscal, from Rs 54.96 crore in the year-ago period.

Total income rose to Rs 605.11 crore during the July-September period of the 2023-24 financial year, from Rs 369.20 crore in the corresponding period of the previous year.