Nuvama has upgraded its rating for Godrej Properties (GPL) to ‘Buy’ from ‘Hold’, with a revised target price of INR 3,415 per share, representing a 17% upside from the current market price of INR 2,897. This upgrade follows GPL’s robust business update shared by the company for the second quarter of FY25, highlighted by record pre-sales and significant improvements in cash flows.
In Q2FY25, Godrej Properties reported pre-sales of approximately INR 52 billion, marking a 3% year-on-year increase, although down 40% quarter-on-quarter. This performance represents the company’s best-ever pre-sales for a second quarter. The first half of FY25 saw bookings surge by 89% year-on-year.
Additionally, collections in Q2FY25 soared by 68% year-on-year and 33% quarter-on-quarter, indicating strong demand and efficient execution. The company generated operating cash flows (OCF) of around INR 18 billion during the quarter, a 120% increase year-on-year. For H1FY25, OCF stood at INR 28 billion, up 200% year-on-year.
Godrej Properties also added six new projects in Q2FY25 with a gross development value (GDV) of approximately INR 96 billion, bringing the total GDV for H1FY25 to around INR 126 billion.
Nuvama attributes the upgrade to an anticipated improvement in cash flows and the recent correction in GPL’s stock price. The brokerage also expects the sales momentum to remain strong, driven by the ongoing positive trend in the housing market.
Overall, Nuvama’s positive outlook on Godrej Properties is reinforced by the company’s strong financial performance and strategic project additions, making it a compelling investment opportunity in the real estate sector.
