“We also happened to do a fantastic launch by the name of Godrej Reserve in Kandivali, which is now the highest selling project of Mumbai real estate again ever, so something like 2,700 odd crores, 2,690 to be very specific,” says Gaurav Pandey, MD & CEO, Godrej Properties.

I have to talk about FY24. All of it has been such a stellar year for you guys. Robust sales, consumer demand, all of it has been extremely at an all-time high. But where do you see the demand trend going forward for your key markets like MMR, NCR? Tell us about the traction that you are witnessing on ground and do you believe that there are further legs to this rally?
I think this has been an extraordinary year for Godrej Properties, specifically in Mumbai market. Quarter four has broken all sorts of records for us and including real estate market in Mumbai. We did about 4,000 plus crores of sales in Mumbai metropolitan region, which till date is going to be the highest booking value done by any residential real estate developer in India in Mumbai market.

We also happened to do a fantastic launch by the name of Godrej Reserve in Kandivali, which is now the highest selling project of Mumbai real estate again ever, so something like 2,700 odd crores, 2,690 to be very specific.

In north again we had a fantastic year. This is the first time we have done 10,000 crores of sales in that market and it is again backed by very holistic quarter-on-quarter kind of performance for north India business for us and in quarter four specifically we had a project by the name of Godrej Zenith which now is the highest selling project for Godrej Properties ever.

So, this is like a 3,000 crore kind of a launch we saw and at a fantastic price, at the fantastic quality of sale as well. So, yes, overall, 22,500 crores of overall sales backed by some amazing finishing successes that our teams could hit in quarter four.

Now bookings have been more than doubled on a quarter-on-quarter basis, some stellar numbers coming in. So, what are you guiding on this front provided that you have already expected your guidance for FY24 by about 50-60%?
Normally quarter four for us has always been the best quarter because see, finally the numbers move through launches and launches as algorithm it is a combination of the kind of land deals you are able to buy and basis that the inventory that you are able to generate and approvals on timelines.

I think to the extent this happens, booking value is more of an outcome. Usually that has been the trend that every time quarter four happens to be the best, but it would not be fair for me to kind of give you any view on quarter one or thereabout, but yes, I think directionally if you see from an annual point of view, we would like to have a good rate of growth.

We give guidance which is more something we are sort of certain about, but aspiration is always to try our best to lap into any opportunity that market is currently presenting us.

Talk to us about the project mix and what are the plans down the line?
Fortunately for us, we had done some amazing amount of business development deals, again a different record in itself and this is throwing us launches in every practical geography.

We would give sort of a launch calendar in our investor presentation, which will come next month, but still to give you an indication, north will have continued back-to-back launches. We will have something in Noida coming very soon, sector 146.

We had bought two very prime land parcels in Golf Course Road, Gurgaon, which will hit the calendar in this year. And we also have something very exciting in Dwarka Expressway belt as well.

So, I think we have a good pipeline there. We have a similar exciting pipeline in Mumbai. In fact, the project that I was talking about, that is just a fraction of the total projects. We will have more and more launches happening over there and then we have an exciting plan both in Pune market and if you see, we have done major acquisition in Hyderabad market in Bangalore last year, which will start hitting the launches this year.

So, yes, overall, fairly well diversified and very high action-packed kind of a calendar is available, but yes, we have to see how quickly can we bring to what specific quarter these launches that is something an effort has to get into, but I am reasonably confident that the deals will allow us to continue ripen the fruits that our teams are very focused upon.

Also, this is your best ever sales quarter for a third quarter now in a row. What is the outlook then for pre-sales figure, say for FY25?
I think pre-sales will see momentum because we have a great launch calendar ahead of us and I do feel that our south business will also pick up significantly.

But specific booking value guidance like I said sometime back, we will mention hopefully in the next presentations that first we will discuss with the board and then we will share the investor presentation if we feel that is the right time, that is what we always have been doing.

But yes, fair to say that we have fantastic launch calendar ahead and that gives a very good sense that we will have good continued growth ahead.

So, out of the new projects launched in FY23, four projects, Mumbai, NCR, Pune, Bengaluru and the second phase launches both in NCR have been delayed. What is causing the delay?
See, without getting into specific on how much got delayed and why, I think if you see typically in this business you have controllables and you have non-controllables. Now controllable part of value chain is which markets you want to focus, what is going to be capital strategy, what is going to be your ability to design a product basis consumer thesis, consumer research, these are controllables.

But the unfortunate part of this business is that you have to get into approval process which is dependent on government and the different parts of the year and different departments and different jurisdictions will have different pace.

Frankly, it is sometimes very frustrating that you are trying your best to get an approval, takes time, but I think that is the nature of this business, you have to take it with a pinch of salt from an approval process.

But what we have been able to do for us at a larger thesis that we have been able to become more and more efficient in terms of design process, ensuring that we can save as much time we can do on the controllable bucket and then try and hope that being diligent and follow up with the relevant department you get approval.

Sometimes, you get certain approvals, sometimes certain approvals do not happen, but then you still do not want to give up. So, if you see last financial year, while some launches have moved on, so some of the launches may happen even Q1 as we speak, but we still manage to pull off because some approvals did come before we expected those could come.

So, it is a combination of expectations that we have and some business estimates we sort of build and we also have a contingency plan. Sometimes you are lucky you get everything right and sometimes even if you hit a particular percentage ratio, your contingency kind of makes up more than for it, which happened in quarter four.

What about your revenues because they have risen quite substantially. So, how many of your projects have hit the revenue recognition stage?
See, if people who value and understand how the valuation works in sector as you rightly said is a combination of how OCs kind of come in and that is when your profit gets recognised.

But a challenge for the sector is that there is some amount of lag which happens. So, if let us say I have sold 9500 crores in quarter four, if let us say some projects are very early stage in that, that revenue will happen say three years from today. But let us say there is some sales that have may happen in a plotted development which is OCs already coming up, then of course the revenue recognition happens accordingly.

It is a sort of a dilemma that any developer goes through. How we tend to see directionally internally is that we see what is the kind of PAT margins we are locking in our sales, what is the kind of margin expansion we are able to achieve, what is the kind of collection run rate we are able to hit and how is this directionally sales and more important than sales alone is the quality of sales and as a quality of sales, what is the kind of payment plan and the brokerage M&B costs that we do, I think with some reasonable amount of confidence I will say we will probably be the best in class in this industry and that some of these indicators when you build into a model you can sort of make an estimation of forward looking revenue which we do and so does various analyst reports do indicate.

Let us talk about your commercial portfolio as well because you have stated that four out of the five balance projects are going to be completed in FY25. Is that on track and what is the top line visibility that you are getting from your commercial portfolio?
See, essentially commercial real estate is a sort of we have an investment in, as you know, in Godrej Fund Management in some of these assets which is hitting it and I would simply at the moment, without telling you a specific per se, we have anyways indicated the total revenue potential that is emanating from them in a life cycle of it, but I think as and when these will get into occupancy certificates, we would be able to lease them fully and get the revenue in ourself.

Place where we are sitting right now, just 30, 40, 50 meters from here is the Taj Hotel, which is also a property owned by us. As part of it, it is doing far better than we were expecting. We are also struggling to get our leadership team get the rooms over there, so sometimes that is very heartening to see, we want to do a conclave, we had to book almost a month in advance. So, I think commercial is going to do very well in the long run and we at least are seeing some early indications of that. But frankly speaking, our portfolio is more balanced, more residential to be very candid and this is more of the kicker that the business will be able to enjoy as these are hitting the rental income cycle very soon.