Godrej Properties booking value down 44% in Q1; Costs rise

Godrej Properties, among the few large and healthy real estate companies remaining in India, reported a disappointing set of numbers for the first quarter.

The company said booking value, or the value of properties booked by customers in the three months, fell to Rs 820 crore from Rs 1,474 crore a year ago.

Similarly, booking volumes fell to just 1.17 mln square feet against 1.80 mln a year earlier.

The company’s EBITDA decreased by 34% to Rs 125 crore, resulting in the net profit falling by 65% to Rs 34 crore.

The key difference in its P&L was in ‘cost of sales’, which rose by Rs 252 cr on year, compared to an increase of Rs 170 cr in total revenue.

Total Income increased by 19% to INR 1,055 crore from INR 888 crore.

The company said the new accounting method, IND AS 115, requires revenue to be recognized based upon point in time or using the Project Completion Method.

“Cumulative effect of revenue recognized for contracts other than completed contracts has been reversed in the opening reserves and the same shall be accounted in future in accordance with criterion mentioned in IND AS 115,” it said.

Chairman Pirojsha Godrej called it an “eventful start” to the year.

“The new accounting standards fundamentally change the way we recognize revenues and will lead to more volatility in reported earnings,” he said. “Given the exciting launch pipeline, we remain confident of a pickup in sales performance in the year ahead.”

The company raised Rs 1,000 crore through a preferential issue in June 2018. “This will help us to accelerate the scale of expansion in our top four focus markets and capitalize on the many opportunities in the business development space,” Godrej added.

The company said adjusted EBITDA increased by 22% to Rs 280 crore.

GPL’s net debVequity ratio now stands at 0.70.

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