Godrej Properties will leverage its robust brand and financial position to tap into consolidation opportunities arising in the real estate sector owing to the Covid-19 crisis, said executive chairman Pirojsha Godrej.
“Our focus will be to make sure that we maintain a healthy balance sheet and ensure business continuity and stability, but equally on making sure we use this period to drive faster the consolidation that has been happening in the industry and seek to grow our market share as fast as possible,” said Godrej.
He said Godrej Properties is well prepared to tap into growth opportunities that may present themselves given that there is some distress in the sector, as a lot of developers are struggling with cash flow issues and a demand slump.
Last month, the Godrej Group’s real estate development arm raised Rs 1,000 crore through non-convertible debentures on a private placement basis for a period of three years at 7.5%. It had raised Rs 2,100 crore last year through a qualified institutional placement.
Apart from its independent projects, Godrej Properties has already been using asset light and capital efficient joint developments to boost its growth and market share.
The company reported consolidated net loss of Rs 20 crore in the quarter to June, which was marked by the impact of Covid-19 on the economy. Total income during the quarter plunged 76.7% year-on-year to Rs 165 crore.
“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,” said Godrej.
He said the company relied on digital tools to achieve robust sales during the quarter.
The company reported a total booking value of Rs 1,531 crore and booking volume of 2.51 million sq ft, up from total booking value of Rs 897 crore and total booking volume of 1.35 million sq ft a year ago.
Godrej said he expected poor reported earnings and cash flows in this financial year due to the lockdown and a major impact of movement restrictions on its annual construction plan. However, he said he saw strong momentum in both portfolio project additions and new project launches during the rest of the financial year.
“The current crisis will add further momentum to the process of consolidation that is underway in the sector and we will continue to focus on rapidly growing our market share,” he said.