Godrej Properties aims 4-times profits of current levels in next 3 years
New Delhi: Mumbai-based Godrej Properties Ltd (GPL) is looking at clocking four-times profits of the exiting levels of profits in the coming three years with 20 percent Return On Equity (ROE).
Replying to an investor query recently, Pirojsha Godrej, Executive Chairman, GPL said “….the main intention for us here is to make sure we use this year as a key platform to get to our medium-term goal of 20 percent ROE, which we would like to achieve over the next three years,”.
His reply was in the affirmative to another investor query which was: “Pirojsha, you mentioned earlier that we plan to expire 20 percent ROEs over the next three years. So in that case, looking at our current equity base, are we looking at clocking profits of about Rs. 1,000 crore for the next three years, which is almost 4x of current run rate?”
The company aims to increase its profits many-fold with three-pronged strategy-Firstly, it will launch sufficient number of projects in time and also get regulatory approvals for the same. Secondly, it plans to achieve the critical “effectiveness” of the launches and then sell sufficient volumes in the projects thus launched. Thirdly, it aims to complete these projects in projects in time so as to achieve revenue recognition from the same in time.
Also, it plans to complete in the next three years some of the phases of the largish projects that are already under construction like the iconic RK Studios in Mumbai, Okhla in South Delhi and Mumbai SRA projects.
The company had a net profit of Rs 312 crore in the 2019-20 fiscal, Rs 209 crore in 2018-19 fiscal and Rs 240 crore in 2017-18 fiscal.
The company suffered a net loss of Rs 20 crore for the first quarter of the ongoing fiscal as against a net profit of Rs 89 crore in the same quarter of the previous fiscal. The revenue from operations of GPL tanked 89 percent to Rs 72 crore for the first quarter of the ongoing fiscal as compared to Rs 635 crore in the same quarter of the previous fiscal.