Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Initiating Coverage on Godrej Properties - The housing factory - HDFC Securities

Posted On: 2020-11-27 02:40:33 (Time Zone: Arizona, USA)


Mr. Aditya Makharia , Institutional Research Analyst, HDFC Securities

Godrej Properties Ltd (GPL) is a sectoral bell-weather with an innate capacity to build homes. Over the years, it has metamorphosed into a seamless home manufacturing machine with the shortest production time from land acquisition to approvals to launches and sales. In this journey, it has gained market share and emerged a crucial challenger in the respective micro-markets; it is on its way to becoming a leader. Given strong brand, robust financial capacity and strong execution capabilities, landowners/Tier 2 developers have been partnering with GPL for JV opportunities. The growth journey is expected to crystallise further with the regulatory landscape changing over the years, in favour of organised developers. We believe GPL only constrains itself, and that is its biggest strength or weakness. Given recent run up we initiate coverage on the stock with an ADD recommendation and SOTP of Rs 1,164/sh (40% NAV premium).

- Whilst others want to grab it all, GPL stays focused on residential: GPL has always stressed that it anchors its strategy mainly towards residential developments. The market has been giving premium to mixed-use players with exposure to annuity and residential developments. In between, the capital allocations get jumbled up in office/retail/hospitality and residential. GPL is clear that it would allocate the lion share of its capital to residential, which reflects in strong market share gains over the years in the Top-4 regions of Mumbai, Pune, Bengaluru and NCR. We believe it would continue to dominate these markets and remain developer of choice for buyers, given its strong track record and robust housing demand.

- Regulatory overhaul could consolidate the market among 8-10 developers: Over the past few years, demonetisation, RERA, GST, NBFC crisis and COVID-19 have restricted sectoral funding, resulting in consolidation of market share amongst Top 5-10 developers. GPL's massive expansion has been in sync with the long-pending regulatory overhauls. It has been averaging at 1-2.5mn sqft per micro-market and is well-poised to double the presales over the next four years. Whilst other developers are defocused on residential, GPL has a hawk-eye on residential opportunities, from perspective of both business development (BD) and launches.

- Cash flow to remain mostly negative, BD opportunities to lead to debt build out: Whilst the past three years' BD efforts have started paying off in terms of new launches, GPL may continue to pursue new BD deals. Although a large part of the BD funding may be met with project cash flows, GPL has given net D/E target of 1x, which implies about Rs 20-25bn outlay on land acquisitions over the next four years. GPL maintains a 20% ROE target from FY23/24E. Interest cost for GPL at 7.5% pre-tax (~5% post-tax) reduces the cost of capital and aids accelerated launches in the key markets.

Shares of Godrej Properties Ltd was last trading in BSE at Rs.1110.8 as compared to the previous close of Rs. 1083.1. The total number of shares traded during the day was 42627 in over 2475 trades.

The stock hit an intraday high of Rs. 1122 and intraday low of 1091.25. The net turnover during the day was Rs. 47103803.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Wipro - Beware of integration / impairment risks! - ICICI Securities

Easy Trip Planners Ltd - IPO Review - ICICI Direct

ICICI Direct - Derivatives Weekly View (March 5): Level of 14700 remains crucial for upsides to continue...

Easy Trip Planners Ltd. - IPO - Strong Financials - Reliance Securities

Bharat Forge - Initiating Coverage - Constant evolution - HDFC Securities

Mahindra Logistics - Large-ticket deal win - ICICI Securities

Company Update - Huhtamaki India - ICICI Direct

Gladiator Stocks: IndusInd Bank, VIP Industries - ICICI Direct

Warehousing demand expected to grow around 160% to reach 35 million sq. ft in 2021: JLL

Telecom - Spectrum auction: Prudent investment by Bharti Airtel - ICICI Securities

JB Chemicals & Pharmaceuticals - Analyst meet takeaways - ICICI Securities

IPO Review - MTAR Technologies Ltd - ICICI Direct

Auto Sector - Monthly Volume Round-up - Feb 21 - Decent YoY Growth Continues

Aditya Birla Fashion and Retail - Focus on scaling up new businesses - ICICI Securities

Automobiles (wholesale) - Wholesales push continues despite modest retail trends - ICICI Securities

Aditya Birla Capital - Thoughtful (inclusive) conglomerate business evolution commands premium - ICICI Securities

Jubilant Foodworks - Buying in-the-money options - ICICI Securities

Multi Commodity Exchange of India - Play on rising commodity prices? - ICICI Securities

Gladiator Stocks - Sudarshan Chemical - ICICI Direct

Monthly Commodities Outlook - March 2021 - ICICI Direct

ICICI Direct - Monthly Currency Outlook: Rupee to depreciate further towards 75.00 level...

ICICI Direct - Covid Recovery Pulse - E-way bill generation in February 2021 starts on strong note...

Company Update - Virtual JLR Investor Event - Tata Motors - ICICI Direct

Analyst Meet Update - Aditya Birla Fashion and Retail - ICICI Direct

MTAR Technologies Ltd. - IPO - Huge Opportunities from Clean Energy Bodes Well - Reliance Research

ICICI Direct Derivatives Weekly View (February 26): Failure to move above 14700 may extend declines towards 14300...

Bank: Sector Credit Trends - Slows, Yet again - HDFC Securities

Piramal Enterprises - Pharma day highlights - ICICI Securities

Polymer price tracker - PVC prices rise sharply again! - ICICI Securities

Greenply Industries - Growth returns, at an inflection point - ICICI Securities

Tata Motors - JLR future proofing itself with rapid electric transition - ICICI Securities

Dairy - Higher freight cost and increase in Global SMP prices - ICICI Securities

Analyst Meet Update - Nestlé India (Hold): Focus on product innovation, expanding rural reach - ICICI Direct

MTAR Technologies Ltd - A strong player in booming high precision engineering... - Geojit

Rollover Report for February - March 2021 : Angel Broking

Reaction from industry experts on Q3FY21 GDP numbers

M. Govinda Rao, Chief Economic Adviser, Brickwork ratings on Q3FY21 GDP numbers

Mr. Dhiraj Relli, MD & CEO, HDFC securities views on Q3FY21 GDP Growth Number

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on Q3FY21 GDP

Rollover Analysis - Feb 21, 2021 - YES Securities

Consumer Durables - Demand-driven recovery continues - HDFC Securities

Cement - Demand surprises; earnings upgrade to continue - ICICI Securities

Gladiator Stocks - TeamLease Services - ICICI Direct

Gladiator Stocks - Metals to outshine post multi-year breakout... - ICICI Direct

Company Update - Sundaram Finance - ICICI Direct

Indian pharmaceutical industry to meet an ambition of US$130 billion by 2030 through innovation-led growth: EY-FICCI report

4th Industrial Conclave - Bullish undertone, favourable valuation - HDFC Securities

Sanofi India - Weak quarter; sequential improvement - ICICI Securities

Sunteck Realty - All eyes on upcoming launches - ICICI Securities

Company Update - Tata Motors - ICICI Direct



Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020