Our priority is to launch all projects added over last two years within this financial year: Pirojsha Godrej

“But Rs 14000 crores, I think would be 2x growth over a three-year period which we do think is pretty strong growth and something we would be quite happy with,” says Pirojsha Godrej, Godrej Properties.

In FY23 you managed to comfortably surpass the full year sales guidance. So, for FY24 does that guidance of Rs 14000 crore in sales look a bit conservative given that the momentum seems rather robust?
No, I think we are thrilled with the year gone by from a sales perspective. We were able to grow bookings during the year by 56%. So, of course, it is a high base that has been created. As you mentioned, it was about 22% higher than the guidance we had given. When we were thinking about our growth plans a couple of years ago, what we had said was that in FY23, we wanted to do Rs 10000 crores of sales and thereafter compound that at about 20% a year. We have done more than Rs 12000 cr in FY23 itself. So Rs 14000 crore does feel a pretty good number for the current financial year. Of course, like last year, the hope will be to go considerably past that. And I think if all of our regulatory approvals come-in in time, we should be able to do that. But Rs 14000 crores, I think would be 2x growth over a three-year period which we do think is pretty strong growth and something we would be quite happy with. The fourth quarter of the last financial year was our best ever quarter and we sold over Rs 4000 crores of properties during that quarter. So, hopefully we can build on that momentum in the current quarter and in the year ahead.

After two subdued years business development momentum has picked up, but your guidance for FY24 has remained the same levels as FY23. Why is that?
Well, I think Rs 15000 crore project additions would actually be a very strong number. I think it is useful to correlate this with the kind of sales we are doing because we are not looking to build a land bank of a typical sort. We are trying to just add projects to allow us to continue to sustain our growth. Last year was an absolutely exceptional year for business development. I think we added as many as 18 new projects, surpassed our guidance by more than 100%. So, I think we first of all feel that we already have now a very strong portfolio. So, we do not really need to add that much inventory every year because we have enough to fund rapid growth already. But again, certainly the ambition would be to surpass this year’s guidance as well.

Business development is something that is quite dependent on exactly which deals end up happening and going through and not going through. So, we prefer to give a guidance that we are quite confident of and hopefully surpass it.

An uptick of 24% in Q4. How many new projects have hit revenue recognition in Q4?
Yes. So, a lot of the year’s revenue was registered in the fourth quarter because the way the accounting for the sector works is that you only account for a project revenue and profits once that project is completed and you receive the occupation certificate. So, out of a little over 10 million square feet of deliveries we had last year, as much as 8 million square feet happened in the fourth quarter which is why the revenue and profits were also quite back-ended last year.

The number of projects I do not recall offhand, but we had several different projects and phases of projects delivered during the fourth quarter. We have guided that in the current financial year and we expect as compared to about 10 million square feet of deliveries last year to do about 12.5 million square feet of deliveries. So, we do expect to build on the momentum we have seen there.

The board as well has approved raising close to Rs 2000 crores via debt securities. How do you plan to utilise these proceeds and how is leverage expected to move post this?
Yes, very much so. We have typically guided that we would like to have our debt equity operate between a range of 0.5:1 to 1:1. We are currently under that range at 0.39:1. So we do think we have appetite and room for adding some debt to further increase the pace of growth. At the same time, we do feel quite good about the strength of the existing portfolio. So, we feel that the bigger priority this year rather than new business development is actually making sure all of the projects we have already added over the last couple of years are launched within the financial year.

Could you also tell us about the launch pipeline in different geographies and any plans of doubling down in Bangalore given the attractiveness of that market?
Yes, I think our launch pipeline across the country is very strong in the current financial year. We have about 20 million square feet of launches of either new projects or new phases of existing projects planned. We launched a little under 15 million square feet last year. So, if we are able to do the 20 million, it would be strong year on year growth. And that we think is quite well distributed from a geographic perspective. Bangalore is certainly an important focus market for us.

We saw last year, our sales in Bangalore tripled year on year. We have a lot of new exciting projects in Mumbai which again is an area where we feel we have significant opportunity to further expand our market share. And NCR and Pune are two geographies where we have been doing well but feel that there is a lot of opportunity to do even better in the years ahead.