Godrej Properties Q1 Results: Company Reports Loss Even As Bookings Double
The company posted a loss of Rs 20 crore in the quarter ended June.
Godrej Properties Ltd. posted a loss in the quarter ended June amid the Covid-19 outbreak even as its bookings doubled.
The company’s loss in the three months through June stood at Rs 20 crore compared with profit of Rs 90 crore in the year-ago period. Total income stood at Rs 165 crore compared with Rs 708 crore as on June 2019.
Yet, the company’s booking value rose 71% year-on-year to Rs 1,531 crore. Booking volumes nearly doubled to 2.51 million sqft in the first quarter during the same period.
“With the lockdown in place for most of the quarter, construction activities during the period were extremely limited leading to almost no revenue recognition and to poor operating cash flows,” the company said in a statement. “At the same time, our teams demonstrated agility by relying on digital sales tools to achieve strong sales thereby delivering our highest ever market share in a quarter.”
Demand in India’s real estate sector hasn’t recovered since an overnight ban on cash in November 2016 and a stricter housing laws that protected buyers against fraud. A slowing economy aggravated the slump and stalled projects, which was further aggravated by the pandemic.
“While we expect poor reported earnings and cash flows this financial year due to the lockdown and the major impact this has had on our annual construction plan, we expect strong momentum in both portfolio project additions and new project launches during the rest of the financial year,” Pirojsha Godrej, executive chairman of the developer, addressed the media over video conference on Wednesday.
Godrej said the current crisis will accelerate consolidation that’s underway in the sector and the company will focus on rapidly growing its market share. The company is expecting a delay of nearly six months in its construction timelines owing to the disruption caused by the pandemic.
The developer has raised Rs 1,000 crore in July through the allotment of unsecured, redeemable, non-convertible debentures on a private placement basis for a term of three years at 7.5%. Godrej said the company is focusing on the NRI market where the demand was stronger than the domestic demand.
He said the company hasn’t cut prices in any of its projects and has instead offered payment plans which allowed flexibility to customers. “The cost of flexibility is loaded on to the price of the project.”
Other Highlights (YoY):
- Revenue fell 88.6% to Rs 72.3 crore.
- Ebitda loss at Rs 53.6 cr vs Ebidta gain of Rs 123 crore.