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Godrej Properties shares fall 3% post Q1 earnings: Buy, sell or hold?

Godrej Properties shares fall 3% post Q1 earnings: Buy, sell or hold?

Godrej Properties stock slipped 3.13 per cent intraday to Rs 1,417.3 against the previous close of Rs 1,463.15 on BSE.

Godrej Properties stock trades higher than 20-day, 50-day and 100-day moving averages but lower than 5-day and 200-day moving averages. Godrej Properties stock trades higher than 20-day, 50-day and 100-day moving averages but lower than 5-day and 200-day moving averages.

Shares of Godrej Properties fell over 3 per cent today despite the real estate developer reporting a 168% rise in profit for the quarter ended June 2022. Godrej Properties stock slipped 3.13 per cent intraday to Rs 1,417.3 against the previous close of Rs 1,463.15 on BSE.

The stock trades higher than 20-day, 50-day and 100-day moving averages but lower than 5-day and 200-day moving averages.

The share has lost 24.23 per cent since the beginning of this year and fallen 14.5 per cent in a year. Godrej Properties stock is trading higher than 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.

A total of 0.17 lakh shares of the firm changed hands, amounting to a turnover of Rs 2.47 crore. Market cap of the firm fell to Rs 39,396 crore on the BSE.

The stock hit a 52-week high of Rs 2,598 on October 14, 2021 and a 52 week low of Rs 1130.20 on June 20, 2022.

Net profit rose to Rs 45.55 crore in Q1 against Rs 17.01 crore profit in the June quarter of the previous fiscal.

Sales zoomed 184 per cent to Rs 244.67 crore in Q1 against Rs 86.16 crore in the corresponding quarter of the previous fiscal. The company also logged the highest ever quarterly sales with a total bookings value of Rs 2,520 crore, zooming 407% from a year ago.

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However, profit shrinked 82.51% on a quarter-on quarter basis from Rs 260.47 crore.

Sales too fell 81.61 percent from Rs 1,330.64 crore on a q-O-q basis.

UBS has assigned a sell call to the stock with a target price of Rs 1,190.

"The firm saw a healthy start in Q1 but addition of new projects is important. Reported revenue at Rs 240 crore while EBITDA was negative at Rs 14 crore as no projects got delivered during the quarter. Net debt in Q3 rose by Rs 500 crore to Rs 960 crore," said UBS.  

CLSA cut its target price to Rs 1,523.

"Low collections, steady spend drag cash flows and MD & CEO resigning are key concerns. Maintains presales guidance of Rs 10,000 crore plus for FY23.  The company expects cash flows to improve, led by a pick-up in collections. We remain cautious and cut margin estimates," the brokerage said.

Morgan Stanley is underweight on the stock with a target price of Rs 1,487.

"Revenue zoomed 184% yoy to Rs 245 crore on a low base. The firm reported adjusted EBITDA of Rs 132 crore, rising 58% yoy. Profit after tax came at Rs 43.3 crore, falling 82% qoq vs. estimate of Rs 67.5 crore. Net debt stood at Rs 960  cr (Rs 460 cr net debt qoq) at 11% net gearing," said Morgan Stanley.

Motilal Oswal has assigned a neutral rating to the stock.

The management reiterated its FY23 sales guidance of over Rs 10,000 crore. It expects to grow the same by 20 per cent over the next two-to-three years.

"At 1.7 times P/NAV, a large part of this growth is already priced in. We maintain our terminal growth assumption at 3% as we await clarity and progress on business development. We reiterate our Neutral rating on the stock with an unchanged target price of Rs 1,300, a downside potential of 11%," said Motilal Oswal.