Add Godrej Properties, target price Rs 1418: HDFC Securities

HDFC Securities has add call on Godrej Properties with a target price of Rs 1418. The current market price of Godrej Properties is Rs 1138.05.

Godrej Properties, incorporated in the year 1985, is a Large Cap company (having a market cap of Rs 33213.77 Crore) operating in Real Estate sector.

Godrej Properties key Products/Revenue Segments include Income From Real Estate Development, Sale of services, Other Operating Revenue and Lease Rentals for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 404.58 Crore, up 9.58 % from last quarter Total Income of Rs 369.20 Crore and down -13.35 % from last year same quarter Total Income of Rs 466.91 Crore. Company has reported net profit after tax of Rs 94.51 Crore in latest quarter.

The company’s top management includes Mr.Adi B Godrej, Mr.Pirojsha Godrej, Mr.Mohit Malhotra, Mr.Jamshyd N Godrej, Mr.Nadir B Godrej, Mr.Keki B Dadiseth, Mrs.Lalita D Gupte, Mr.Amitava Mukherjee, Ms.Sutapa Banerjee. Company has B S R & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 28 Crore shares outstanding.

Investment Rationale
The profitability and margin is expected to improve with a higher proportion of outright business development (BD) coming in at better realisation. The company maintained 10msf of delivery target forFY23, which may result in strong revenue recognition in Q4FY23. Net debt increased substantially to Rs 25.7bn (vs. INR 13.7bn as of Sep-22), with net D/E at 0.29x (vs. 0.16x as of Sep-22) on the back of robust BD. The brokerage reiterates its ADD with an unchanged SOTP valuation of Rs 1,418/sh.

HDFC Securities believes risk reward has become favourable post the correction.

Promoter/FII Holdings
Promoters held 58.48 per cent stake in the company as of 31-Dec-2022, while FIIs owned 27.41 per cent, DIIs 4.4 per cent.