50% of sales of Godrej Properties from NRIs in Q1FY21; co says such figures not ok in long run

New Delhi: Even is job prospects of Indians abroad may not be exactly buoyant at the moment, NRIs accounted for as much as half of the sales of Godrej Properties Ltd (GPL) in the first quarter of the ongoing fiscal.

All the booking volume of 2.5 million square feet recorded by the company in the first quarter of the current fiscal was done digitally. “Because this (first quarter) was a period of extreme lockdown in the country and tactically people couldn't go and see their sites. And that's also one of the reasons why the share of international market was much higher than the domestic market. All of these sales are completely locked, fully contracts are in place,” said Mohit Malhotra, MD and CEO, GPL while interacting with investors recently.

The total booking value of properties in the latest quarter increased 71 percent to touch Rs 1,531 crore as compared to Rs 897 crore in the same period of the previous fiscal.

However, the company does not deem it fit to have such high sales percentage coming from overseas Indian. “I think, frankly, our goal is, we don't want the NRI sales to be at 50 percent forever, that's probably not the most healthy dynamic. We actually want our sales from locals to go up significantly. But I think it was a good thing in Q1 to fill an obvious gap,” said Pirojsha Godrej, Executive Chairman, GPL while reply to an investor query. 

Although the company saw continued demand even in July, that is, after the first quarter, but the realty player does not expect NRIs sales to be as much as 50 percent of the overall sales for the entire fiscal. “Nor would we consider that desirable (Having half of the les being accounted for by NRIs for the entire fiscal)”, added Godrej.

The company is also seeing recovery in ‘collection efficiency’ rates. There was a decline in collection efficiency in first two months of the first quarter which is back to 90 percent levels from June. Collection efficiency is what percentage of the bill raised by GPL is actually paid by the customer. “For the first two months, which was April and May, we saw a dip in collection efficiency, which means when the bill was raised customers chose not to pay. There was also a lot of confusion, because government had created, there was a lot of noise whether who can pay, who cannot pay interest charges, etc. But from June onwards, we saw our collection efficiency back to (+90 percent) level,” said Malhotra while replying to another investor query.