Godrej Properties cuts net debt by 10% in Q4 on strong cash flow: Pirojsha Godrej

Godrej Properties demonstrates financial resilience as it slashes net debt by 10% in the fourth quarter, fueled by robust cash flow. The company's strategic financial management comes to the fore amidst economic challenges. With this development, Godrej Properties sets a positive precedent in the real estate sector, showcasing effective debt reduction strategies.

New Delhi: Realty firm Godrej Properties has reduced its net debt by 10 per cent in the latest March quarter to nearly Rs 6,200 crore on strong sales and collections of funds from customers, its executive chairperson Pirojsha Godrej has said.

In an interview with PTI, Pirojsha said, "We have reduced our net debt by Rs 700 crore during Q4 (January-March quarter of 2023-24) because of strong operating cash flow." The company's net debt stood at Rs 6,198 crore as on March 31, 2024 as against Rs 6,903 crore at the end of the preceding quarter.

Pirojsha attributed the reduction in the net debt to strong cash collections from customers.

"We have reduced net debt even as we continue to acquire land parcels for future development," he observed.

Asked about the guidance for net debt in the current 2024-25 fiscal, Pirojsha said, "Our debt equity ration was 0.62 at the end of the March quarter. We would like to keep our gearing ratio between 0.5 to 1:1." The net debt level may increase or decline in any particular quarter depending on investment on land acquisitions, he added.

Godrej Properties, one of the leading real estate developers in the country, achieved the highest-ever annual collection of Rs 11,436 crore in FY24 with YoY growth of 27 per cent. It also posted the highest-ever total net operating cashflow of Rs 4,334 crore with YoY growth of 23 per cent.

In the last fiscal, the company's sales bookings jumped 84 per cent to record Rs 22,527 crore from Rs 12,232 crore in the preceding year. This is the highest sales reported so far by any listed entity for the 2023-24 fiscal.

'We have given a sales bookings guidance of Rs 27,000 crore for the current fiscal, a 20 per cent growth from a high base in 2023-24," Pirojsha said.

To meet this guidance, Godrej Properties plans to launch Rs 30,000 crore worth residential projects this fiscal across major cities.

Pirojsha said the housing demand continues to be strong, especially for reputed brands.

According to an investor's presentation, Godrej Properties plans to launch a 21.9 million (219 lakh) square feet area this fiscal with an estimated sales booking value of Rs 30,000 crore.

Not only launches and sales, Pirojsha said the company would continue acquiring land parcels for future development and also step up deliveries of projects.

Last week, Godrej Properties reported its highest-ever quarterly profit as earnings jumped 14 per cent annually to Rs 471.26 crore in the March quarter.

Its net profit stood at Rs 412.14 crore in the year-ago period.

Total income rose to Rs 1,914.82 crore in the fourth quarter of FY24 from Rs 1,838.82 crore in the year-ago period.

During the 2023-24 fiscal, the company's net profit increased to Rs 725.27 crore from Rs 571.39 crore in the preceding year.

Total income rose to Rs 4,334.22 crore in FY24 from Rs 3,039 crore in 2022-23.

The company delivered 12.5 million square feet area in the last fiscal and is targeting to scale it up to 15 million square feet in 2024-25.