31 January 2013
3QFY13 Results Update |
Sector: Real Estate
Godrej Properties
BSE Sensex
20,005
Bloomberg
Equity Shares (m)
M.Cap. (INR b)/(USD b)
52-Week Range
1,6,12 Rel. Perf. (%)
S&P CNX
6,056
GPL IN
78.0
49.1/0.9
696/482
-4/6/-21
CMP: INR629
TP: INR650
Neutral
Financials & Valuation (INR m)
Y/E March
Net Sales
EBITDA
NP
EPS (INR)
EPS Gr. (%)
BV/Sh. (INR)
RoE (%)
RoCE (%)
Payout (%)
Valuations
P/E (x)
P/BV (x)
EV/EBITDA (x)
Div. Yield (%)
2013E 2014E 2015E
10,100 13,569 16,414
2,681
1,267
16.2
29.4
197.6
8.5
7.9
21.6
38.7
3.2
24.6
0.5
3,788
2,000
25.6
57.8
219.7
12.3
11.4
13.7
24.6
2.9
17.5
0.5
4,706
2,635
33.8
31.8
250.0
14.4
13.3
10.4
18.6
2.5
13.9
0.5
Godrej Properties' 3QFY13 revenue stood at INR2.7b (+78% YoY, +14% QoQ),
EBITDA at INR751m (+181% YoY, +5% QoQ), and PAT at INR355m (+24% YoY,
+9% QoQ). Key revenue contributors are: (1) Godrej One (35%), (2) GGC,
Ahmedabad (18%), (3) Prakriti, Kolkata (13%) and (4) Revenue
commencement from Palm Groves, Chennai (11%).
Recent launches in Bangalore E-city (22% of total 3QFY13 sales value), Gurgaon
(12%) and Godrej Platinum (25%) drew decent response, and led GPL's 1msf
(INR6.5b) sales in 3QFY13 v/s 1.1msf (INR7.2b) in 2QFY13. Godrej One
commercial accounted for INR1.1b of fresh sales in 3QFY13.
GPL's 9MFY13 sales (ex Platinum) stood at INR16.4b; our estimate of ~INR23b
for FY13 hinges on the success of guided launch plan in 4QFY13.
GPL has witnessed ~25% QoQ uptick in average realizations in Gurgaon and
Pune projects and 10-15% in Platinum (Vikhroli).
GPL maintained positive operating cash flow (OCF) in 3QFY13 as against
expectation - since the company was due to pay MMRDA premium of ~INR1.5b
in 3QFY13. However the payment has been deferred to CY13 end, which led
to generation of INR1.6b of OCF.
Positive OCF has been utilized towards interest payment of INR520m and
reduction in net debt of ~INR1.05b. Net debt stood at ~INR15.1b (v/s INR16.1b
2QFY13) - implying net DER of 0.99x. Cost of debt stood at 11.77% as against
11.83% in 2QFY13.
Valuation and view
Recent scale-up in launches and steady sales have led to generation of
positive OCF for the company, which lends comfort over possible moderation
in leverage over FY14-15.
Key triggers going forward: a) Success in stated launch plan, b) Monetization
visibility in BKC commercial, and c) potential upside from increase in FSI in
Panvel project.
GPL trades at ~3% discount to NAV, 18.6x FY15E EPS and 2.5x FY15E BV. Maintain
Neutral.
Sandipan Pal
(Sandipan.Pal@MotilalOswal.com); +91 22 3982 5436
Investors are advised to refer through disclosures made at the end of the Research Report.

Godrej Properties
Revenue booking up +14%QoQ; Chennai project crossed recognition
threshold
3QFY13 revenue stood at INR2.7b (+78%YoY, +14%QoQ), EBITDA at INR751m
(+181%YoY, 5%QoQ), while PAT at INR355m (+24%YoY, +9%QoQ).
Key revenue contributors are: (1) Godrej One (35%), (2) GGC, Ahmadabad (18%),
(3) Prakriti, Kolkata (13%) and (4) revenue commencement from Palm Groves,
Chennai (11%).
Assuming Godrej One (Vikhroli commercial) EBITDA margin of ~40%, the core
margin at other projects stood at ~24%. This also attributable to insignificant
contribution from loss-making commercial projects at Kolkata.
Revenue contribution led by Godrej One, and
Chennai project (%)
Margins stronger over past couple of quarters due to lower
contribution from commercial (%)
Source: Company, MOSL
Recent launches drove sales; 9M sales up 2.33x YoY; Realizations up 10-
25% in Gurgaon, Pune and Vikhroli
Despite new launches of 0.9msf in 3QFY13, GPL lags its guidance of 10-12 new
launches in 2HFY13, along with potential delay in launch of Hyderabad and Nagpur
Phase 2. Approval delay has deferred launch of GGC phase 5b and BKC commercial
to 4QFY13.
However recent launches in Bangalore E-city (22% of total 3QFY13 sales value),
Gurgaon (12%) and Godrej Platinum (25%) drew decent response, driving GPL's
1msf (INR6.5b) sales in 3QFY13 v/s 1.1msf (INR7.2b) in 2QFY13. Godrej One
commercial accounted for INR1.1b of fresh sales in 3QFY13.
Ex-Godrej Platinum (Vikhroli) where company operates as development manager
with 10% DM fees, 3QFY13 sales stood at INR5.1b (v/s INR7b in 2QFY13).
GPL's 9MFY13 sales stood at INR16.4b v/s estimate of ~INR23b in FY13, which seems
to hinge on the success of guided launch plan in 4QFY13.
Among the older projects sales run-rates have improved in GGC (Ahmadabad),
Prakriti (Kolkata), declined in Chennai, and Nagpur.
GPL has witnessed ~25% QoQ uptick in average realizations in Gurgaon and Pune
projects and 10-15% in Platinum (Vikhroli).
31 January 2013
2

Godrej Properties
Sales driven by recent launches
Trend in average realization (INR/sf)
Source: Company, MOSL
Average realizations across projects in 3QFY13, Summit and Platinum witnessed sharp QoQ
jump
Source: Company, MOSL
Positive OCF led by steady monetization and deferment of payment of
MMRDA premium at BKC; Net debt down INR1.05b QoQ
GPL has maintained positive operating cash flow (OCF) in 3QFY13 as against
expectation - since the company was due to pay MMRDA premium of ~INR1.5b in
3QFY13. However the payment has been deferred - which led to generation of
INR1.6b of OCF.
Positive OCF has been utilized towards interest payment of INR520m and reduction
in net debt of ~INR1.05b.
Net debt stood at ~INR15.1b (v/s INR16.1b 2QFY13) - implying net DER of 0.99x.
Cost of debt stood at 11.77% as against 11.83% in 2QFY13.
31 January 2013
3

Godrej Properties
Average realizations across projects in 3QFY13, Summit and Platinum witnessed sharp QoQ
jump
Source: Company, MOSL
Average realizations across projects in 3QFY13, Summit and Platinum witnessed sharp QoQ
jump
Source: Company, MOSL
Sales trend in key ongoing projects (msf)
Project
FY12
GCC, Ahmedabad
0.66
Frontier, Gurgoan
0.12
Prakriti, Kolkata
0.51
Bangalore - Platinum
0.07
Vikhroli (Platinum)
0.24
Alpine, Mangalore
0.05
Anandam, Nagpur
0.02
Palm Grove, Chennai
0.01
Serenity, Mumbai
Horizon, Pune
Godrej Summit
Gold County, Bangalore
E-City Bangalore
Others
0.09
Vikhroli (One)
0.36
Waterside*, Kolkata
0.14
Genesis, Kolkata
0.13
Etrenia, Chandigarh
0.04
Total
2.44
*Leased 70599sf in Waterside in 4QFY12
31 January 2013
1QFY13
0.14
0.00
0.20
0.00
0.05
0.03
0.10
0.06
0.03
0.04
2QFY13
0.07
0.080
0.02
0.01
0.02
0.06
0.10
0.02
0.05
1.01
0.03
0.01
0.07
0.00
0.01
0.00
1.56
3QFY13
0.12
0.085
0.01
0.10
0.01
0.04
0.06
0.01
0.00
0.11
0.02
0.37
0.00
0.07
0.00
0.03
0.00
1.04
0.02
0.07
0.07
0.01
0.02
0.83
4

Godrej Properties
Valuation and view
Recent scale-up in launches and steady sales have led to generation of positive
OCF for the company, which lends comfort over possible moderation in leverage
over FY14-15.
We believe GPL's continuous acquisition of projects and creation of multiple
revenue streams by leveraging on its strong brand equity offer a huge potential
to scale up operations in a favorable economic cycle.
Nonetheless, moderation in sales in older projects (especially Garden City,
Ahmedabad), and slow-moving commercial projects remain key overhangs to
leverage. Traction in commercial sales is essential to unleash the significant capital
locked in these projects and driving debt reduction.
Key triggers going forward: a) Success in stated launch plan, b) Monetization
visibility in BKC commercial, and c) potential upside from increase in FSI in Panvel
project.
GPL trades at ~3% discount to NAV, 18.6x FY15E EPS and 2.5x FY15E BV. Maintain
Neutral.
31 January 2013
5

Godrej Properties
Godrej Properties: an investment profile
Company description
Godrej Properties Limited (GPL), established in 1991, is
part of the 113-year-old Godrej group of companies. GPL,
which develops residential and commercial properties,
recently entered large township development. The
company expanded its footprint into 12 key tier-1 and
tier-2 cities, with a land bank of ~400 acres and
developable area of ~77msf, where it has economic
interest for over 50msf.
Recent development
GPL has maintained positive operating cash flow
(OCF) in 3QFY13 as against expectation - since the
company was due to pay MMRDA premium of
~INR1.5b in 3QFY13. However the payment has been
deferred - which led to generation of INR1.6b of OCF.
Positive OCF has been utilized towards interest
payment of INR520m and reduction in net debt of
~INR1.05b.
Key investment positives
Focused mid-income housing play with an asset-light
model. GPL's development portfolio is skewed in
favor of JDA projects.
Widely recognized Godrej brand gives GPL the unique
strength to emerge as a true pan-India player.
Valuation and views
Key triggers going forward: a) Success in stated
launch plan, b) Monetization visibility in BKC
commercial, and c) potential upside from increase
in FSI in Panvel project.
GPL trades at ~3% discount to NAV, 18.6x FY15E EPS
and 2.5x FY15E BV. Maintain
Neutral.
Key challenges
Higher inclination towards joint-development model
caps gains during an economic upswing and exposes
the company to the potential risk of operational
conflicts with JD partners.
High leverage could exert pressure on cash flow.
Sector view
RE sector has been an outperformer over past couple
of quarters with multiple operational and
nonoperational headwinds subsiding driven by
favorable macro, monetary easing and likelihood of
interest rate cut. We expect developers with focused
business approach and rationalized product mix are
going to derive benefit and likely to post stronger
operating performances here on.
Comparative valuations
P/E (x)
P/BV (x)
EV/Sales (x)
EV/EBITDA (x)
FY13E
FY14E
FY13E
FY14E
FY13E
FY14E
FY13E
FY14E
Godrej Prop
38.7
24.6
3.2
2.9
6.5
4.9
24.6
17.5
Phoenix
26.9
14.1
1.8
1.6
10.5
5.1
17.8
10.7
Prestige
26.5
16.9
2.5
2.2
4.7
3.4
13.7
9.8
EPS: MOSL forecast v/s consensus (INR)
MOSL
Forecast
16.2
25.6
Consensus
Forecast
17.2
29.6
Variation
(%)
-5.9
-13.4
FY13
FY14
Target price and recommendation
Current
Target
Upside
Price (INR)
Price (INR)
(%)
629
650
3.0
Reco.
Neutral
Stock performance (1 year)
Shareholding Pattern (%)
Dec-12
Promoter
Domestic Inst
Foreign
Others
31 January 2013
75.0
2.3
13.4
9.4
Sep-12
75.0
2.6
13.5
9.0
Dec-11
83.8
2.0
5.9
8.3
6

Godrej Properties
Financials and Valuation
31 January 2013
7

Disclosures
This report is for personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement
to invest in securities or other investments and Motilal Oswal Securities Limited (hereinafter referred as MOSt) is not soliciting any action based upon it. This report is not for public distribution and has been
furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form.
Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates
or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt
or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.
The information contained herein is based on publicly available data or other sources believed to be reliable. While we would endeavour to update the information herein on reasonable basis, MOSt and/or its
affiliates are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates from doing so. MOSt or any of its affiliates or
employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report . MOSt or any of its affiliates
or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness
for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations.
This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision
based on this report or for any necessary explanation of its contents.
MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise in the securities mentioned in this report. To enhance transparency, MOSt has incorporated a Disclosure of Interest
Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Disclosure of Interest Statement
1. Analyst ownership of the stock
2. Group/Directors ownership of the stock
3. Broking relationship with company covered
4. Investment Banking relationship with company covered
Godrej Properties
No
No
No
No
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or
will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible
for preparation of MOSt research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to
law, regulation or which would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
For U.K.
This report is intended for distribution only to persons having professional experience in matters relating to investments as described in Article 19 of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (referred to as "investment professionals"). This document must not be acted on or relied on by persons who are not investment professionals. Any investment or investment activity to
which this document relates is only available to investment professionals and will be engaged in only with such persons.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States.
In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state
laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein
are not available to or intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major
institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended
(the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into
a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within
the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer,
MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst
account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors
Regulations and is a subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore
to accredited investors, as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Nihar Oza
Kadambari Balachandran
Email: niharoza.sg@motilaloswal.com
Email : kadambari.balachandran@motilaloswal.com
Contact: (+65) 68189232
Contact: (+65) 68189233 / 65249115
Office address: 21 (Suite 31), 16 Collyer Quay, Singapore 049318
Motilal Oswal Securities Ltd
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com