Godrej Properties share price hits life-time high on highest ever pre-sales in FY24. Should you buy the stock?

Godrej Properties share price rallied over 3% on Friday to hit an all-time high of ₹3,220.00 on BSE after the real estate developer reported its highest ever pre-sales in FY24.

Realty major Godrej Properties reported 84% year-on-year (YoY) growth in its FY24 pre-sales to record ₹22,500 crore, becoming the largest developer in terms of bookings. 

The performance was mainly led by new launches, which increased by 65% in FY24, of which 70% were absorbed during the year and contributed 70% to total pre-sales. 

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The company’s sales volume increased by 31% YoY to 20 msf while realization rose 40% YoY, driven by a higher contribution from high-realization markets of NCR and MMR and enhanced positioning in the premium segment, brokerage firm Motilal Oswal Financial Services noted.

Pre-sales in NCR trebled to ₹10,000 crore and in Mumbai Metropolitan Region (MMR) rose over two-fold to ₹6,500 crore.

Godrej Properties’ management has guided for pre-sales of ₹27,000 crore in FY25, which implies YoY growth of 20%. With ongoing project inventory of just seven months, launches will again be a key driver of growth in FY25, Motilal Oswal said.

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The company is gearing up to launch projects worth ₹30,000 crore in FY25 across its core markets of NCR, MMR, Bengaluru and Pune, as well as the recently entered Hyderabad market. 

Motilal Oswal expects the contribution from Pune, Bengaluru and other markets to significantly improve going ahead as the company is focusing on monetization after strong business development in these markets.

“The increase in cash flows and ₹3,000 crore of surplus cash will support higher spending without affecting the balance sheet. While Godrej Properties will continue to build on its growth path, the turnaround in cash flows and profitability, which has been a key investor concern, will drive further re-rating in the stock,” Motilal Oswal said.

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The brokerage house reiterated its ‘Buy’ rating on Godrej Properties shares and increased the target price to ₹3,600 per share, implying a potential upside of 16% from Thursday’s closing price.

Godrej Properties share price has given decent returns as the stock is up more than 15% in one month and over 59% year-to-date (YTD). Godrej Properties shares have rallied more than 102% in the past one year.

At 2:45 pm, Godrej Properties shares were trading 3.20% higher at ₹3,203.05 apiece on the BSE.

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