Prestige, Lodha eye Rs 20,000-crore sales club

Godrej Properties, DLF could also reach Rs 20K-cr mark by FY26

Godrej Properties, DLF
A Godrej Properties spokesperson said they would not be able to participate in the story. (File photo)

As they are inching closer to sales booking of Rs 10,000 crore, top listed property developers such as Prestige Estates Projects and Macrotech Developers, which builds properties under the ‘Lodha’ brand, have set their next target of Rs 20,000 crore by FY26. To be precise, Prestige has set a target of Rs 25,000 crore.

Though Godrej Properties has not given any guidance for FY26, given that the company is looking to cross Rs 10,000-crore bookings in FY23, it could easily reach Rs 20,000-crore mark by FY26, said an analyst who did not want to be quoted.

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Bengaluru based Prestige Estates Projects recently said it aims at doubling its annual residential sales bookings to Rs 25,000 crore by FY26 from its current markets and markets such as Mumbai, Pune and the NCR.

“We expect to achieve about Rs 20,000-crore sales from cities with existing presence such as Bengaluru, Mumbai, Hyderabad, Chennai, and others (Kochi, Calicut, Goa, Mangaluru and Ooty). We expect another Rs 5,000 crore from expansion into newer geographies such as the NCR and Pune, where the company plans to expand in the next six months,” said Irfan Razack, chairman and managing director, in a recent interview.

The Indian real estate market absorbed over 450,000 units in 2022. The company’s plan is to capture only about 3.5-4% of the market, which should generate Rs 25,000 crore of annual sales in FY26. Further, the target of Rs 25,000 crore is strategic and is well distributed among key cities in India, Razack said.

Mumbai-based Macrotech Developers is looking at a sales booking of Rs 20,000 crore by FY26.

It expanded into newer micromarkets across the Mumbai Metropolitan Region and Pune through the capital-light joint development route and added 11 new projects amounting to nearly Rs 15,000 crore of cumulative GDV (gross development value). It has already crafted its ‘20-20-20’ medium-term growth strategy. Under this strategy, it plans to deliver a 20% growth in pre-sales, maintain the PAT margin at 20% and generate a return on equity of 20%.

During the April-December period of FY23, Macrotech clocked a 62% growth in sales bookings to Rs 9,039 crore, from Rs 5,568 crore in the year-ago period.

A Godrej Properties spokesperson said they would not be able to participate in the story.

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DLF, the country’s largest developer, reported sales booking of Rs 6,599 crore in 9MFY23, and is expected to close the year at around Rs 9,000 crore, analysts said. Its bookings stood at Rs 4,544 crore in the year-ago period. Pre-launch sales from ‘The Arbour’, a luxury high-rise project at Sector 63 of Gurugram, alone brought in around Rs 8,000 crore in booking.

“DLF could easily reach Rs 20,000 crore in sales bookings by FY26,” said an analyst who did not want to be quoted.

An email sent to the DLF spokesperson did not elicit any response.

In a recent report, Adhidev Chattopadhyay, vice president, equity research — real estate and hotels, ICICI Securities, said all listed developers in the brokerage’s coverage are set to clock record FY23 sales bookings (32% YoY growth) with aggressive launch plans for FY24-25.

“While investors continue to seek linear growth in developers’ residential sales in a cyclical sector, developers themselves are pursuing a path of calibrated growth with moderate price hikes and selectively launching inventory while keeping balance sheets healthy. Hence, we expect our coverage universe to clock 10% sales booking CAGR over FY23-25 on the back of a 31% CAGR over FY20-23,” Chattopadhyay said.

Anuj Puri, chairman at Anarock Property Consultants, said the targets by the big players may seem somewhat ambitious at present, but they are certainly achievable. “They are looking beyond the current times and planning for the future. While we can expect some short-term turmoil due to factors such as inflation, global recession, layoffs, etc, real estate is cyclical and will bounce back. The current upheavals could last till the end of the first half of FY24, but after that we will again see a surge in real estate activity, backed by a consistent demand – which has especially made itself felt post the pandemic,” Puri said.

He added that when inflation is high and the global economy is not doing well, it directly or indirectly impacts the housing demand in India, and many homeseekers may defer their purchases today – but deferred demand is not destruction. “By FY25, the current turbulence will become a part of economic history; the market will have regained strength and buyers will be back on the market in force. This is the future that the big players are planning for today,” Puri said.

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First published on: 20-03-2023 at 04:10 IST