Godrej Properties Ltd

NSE:GODREJPROP

Earnings Call Analysis

Godrej Properties Reports Robust Growth and Strong Outlook

In Q2 FY '25, Godrej Properties achieved record collections and growth, reporting INR 5,198 crores in bookings, up 3% year-on-year. The first half of FY '25 bookings soared 90% to INR 13,835 crores, driven by strong demand in key markets like NCR, Bengaluru, and MMR. Notably, NCR bookings rose 70%, while Bengaluru surged 212%. The company has met 51% of its annual bookings guidance and anticipates exceeding targets as the second half traditionally performs better. Gross operating cash flow increased 126% to INR 1,834 crores, demonstrating effective cash management and scalability in operations.

Record Growth in Collections and Deliveries

Godrej Properties demonstrated remarkable performance in Q2 FY '25, achieving its highest second quarter and first half collections, along with considerable increases in operating cash flows and project deliveries. Over the quarter, the company's booking value rose by 3% year-on-year to INR 5,198 crores, culminating in a staggering 90% increase in the total booking value for the first half, equating to INR 13,835 crores. This performance reflects strong customer engagement and demand for their new projects.

Market Performance Across Key Regions

The company saw significant growth across its major markets. In NCR, booking value surged by 70% to INR 5,424 crores, while Bengaluru experienced a remarkable 212% growth to INR 3,889 crores. MMR also showed strong performance with a 114% increase, bringing in INR 3,113 crores. These metrics illustrate how Godrej Properties has not only maintained but significantly enhanced its market position amidst a thriving residential real estate sector in India.

Expansion in Project Development

Year-to-date FY '25, Godrej Properties added 10 projects, expected to yield a total saleable area of nearly 14 million square feet, with a potential booking value of about INR 17,500 crores. Notably, they achieved business development that encompasses 87% of their annual target by the end of this quarter, which highlights robust project pipeline capabilities. The company anticipates strong growth aligned with new launches planned for the second half of the financial year.

Financial Performance Highlights

For the second quarter, Godrej Properties reported total income soaring by 135% to INR 1,343 crores. The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged 69% to INR 282 crores, while net profit skyrocketed 402% to INR 335 crores. This marked an impressive 345% increase in net profit for the first half, amounting to INR 855 crores, which reflects a strong operational performance and enhancements in various margins.

Optimistic Outlook for Future Growth

Looking ahead, the company remains optimistic about its performance in FY '26, with expectations to exceed current booking guidance and pursue new high-value projects. The management indicated the potential to surpass a 20%-25% Internal Rate of Return (IRR) on new land acquisitions, with intended EBITDA margins between 25% and 30%. Additionally, inquiries into varying project bids indicate a healthy competitiveness within the market, suggesting a sustained trajectory for growth.

Strategic Pricing and Market Flexibility

The company has highlighted strong pricing trends in key markets, particularly in NCR and Bengaluru, with expectations that there will be continued upward momentum in areas where land supply is constrained, such as Gurgaon and Noida. They anticipate this trend will bolster project profitability while also providing the flexibility to explore opportunities in other cities like Ahmedabad and Hyderabad, which they recently entered.

Continued Investment in Land Bank

Following a disciplined land acquisition strategy, Godrej Properties decided to remain cautious in land purchases, maintaining a target IRR of at least 20%-25%. They also disclosed a pending land payment of approximately INR 1,500 crores from previous acquisitions, indicative of their proactive investment approach to ensure sustained growth.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Godrej Properties Limited Q2 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Kshitij Jain. Thank you, and over to you, Mr. Jain.

[Kshitij Jain, executive]

Thank you. Good afternoon, everyone, and thank you for joining us on Godrej Properties Q2 FY '25 Results Conference Call. We have with us Mr. Pirojsha Godrej, Executive Chairperson; Mr. Gaurav Pandey, Managing Director and CEO; and Mr. Rajendra Khetawat, CFO of the company.

Before we begin this call, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation.

I would now like to invite Mr. Godrej to make his opening remarks. Over to you, sir.

[Pirojsha Godrej, executive]

Good afternoon, everyone. Thank you for joining us for Godrej Properties' First Quarter Financial Year 2025 Conference Call. I'll begin by discussing the highlights of the quarter, and we then look forward to taking your questions and suggestions.

The residential real estate sector in India has been strong over the past 3 years, and we believe the sectoral tailwinds will continue over the next few years. The significant levels of business development we have executed in previous years at favorable terms continue to allow us to scale our bookings and margins, which in turn will lead to strong earnings growth in the years ahead.

I'm happy to share that Godrej Properties delivered another robust quarter, registering our highest Q2 and H1 collections, operating cash flows and deliveries. We've already achieved 51% of our annual bookings guidance. In the past 5 financial years, GPL has averaged 37% of its full year bookings in the first half of the financial year. And in the best out of the last 5 years, we achieved 40% of our full year bookings in the first half.

Booking value in second quarter FY '25 grew 3% year-on-year to INR 5,198 crores from the sale of 5.15 million square feet of area and booking value for the first half grew 90% to INR 13,835 crores from the sale of 14.14 million square feet of area, which is a growth of 89% in volume terms. This strong growth can be attributed to an extremely strong customer response to some of our new launches during the quarter.

Godrej Vrikshya in NCR delivered a booking value of just under INR 1,500 crores and Godrej Woodside Estate in MMR, a plotted development project delivered a booking value of just over INR 600 crores. For the first half of financial year '25, bookings in our key markets of NCR, Bengaluru and MMR have shown tremendous growth. In NCR, we grew 70% to INR 5,424 crores. In Bengaluru, we grew 212% to INR 3,889 crores. And in MMR, we grew 114% to INR 3,113 crores. With bookings growth of 56% in financial year '23, 84% in financial year '24 and 90% in first half of financial year '25, GPL has reset its scale. The benefit of this is clearly visible in our cash flows with collections growth of 68% and operating cash flow growth of 125% in the second quarter.

GPL collections stood at INR 4,005 crores for the second quarter of financial year '25, a year-on-year growth of 68% and INR 7,017 crores for the first half, a year-on-year growth of 62%. Operating cash flow stood at INR 1,834 crores for the second quarter, growing at 126% and INR 2,822 crores for the first half, growing at 204%. This is the highest ever second quarter and first half collections and operating cash flow achieved by Godrej Properties.

From a business development perspective, I'm happy to announce that Godrej Properties has added 10 projects in year-to-date financial year '25 with a total estimated saleable area of nearly 14 million square feet and total estimated booking value potential of about INR 17,500 crores. This included 6 new projects with an expected booking value of INR 9,650 crores in the second quarter and 2 new projects with an expected booking value of INR 4,800 crores added in October. GPL has achieved 87% of its annual guidance for business development year-to-date. We have also entered the new micro market of Indore through a plotted development project.

We delivered projects aggregating to 6.6 million square feet across 3 cities in the second quarter, taking the year-to-date total for deliveries to 9.3 million square feet. This is the highest second quarter and first half deliveries for GPL. For the second quarter, our total income increased by 135% to INR 1,343 crores. EBITDA increased by 69% to INR 282 crores and net profit increased by 402% to INR 335 crores. For the first half, our total income increased by 58% to INR 2,981 crores. EBITDA increased by 167% to INR 1,056 crores and net profit increased by 345% to INR 855 crores, surpassing earnings for full year financial '24.

We started financial year '25 on a strong note and hope to build on this momentum through the launch of a large number of exciting new projects combined with strong customer sales. We also expect to deliver a record year from the point of view of cash flow and earnings.

On that point -- on that note, I conclude my remarks. Thank you all for joining us on the call. We'd now be happy to discuss any questions, comments or suggestions you may have.

[Operator]

[Operator Instructions]

The first question is from the line of Puneet Gulati from HSBC.

[Puneet Gulati, analyst]

Congratulations on great numbers here. My first question is it looks very, very likely that you will exceed your booking value guidance. What should we assume that you'll be aiming for in FY '26?

[Pirojsha Godrej, executive]

Thanks, Puneet. Yes, I think we're on track to do well on the bookings front. We've already surpassed 50% of our full year guidance. And typically, the second half is significantly stronger than the first half, both for seasonality reasons and otherwise. I think the goal will be to do as well as we can this year and then continue to deliver strong growth on that in the year ahead. So without getting into specific numbers, which we'll comment on towards the end of the year, I think given the portfolio we've built, given current visibility on how the market is doing, I think we're all set for another exceptionally strong year of sales growth this year, and we'll look to build on that with strong growth next year as well.

[Puneet Gulati, analyst]

Okay. And secondly, in terms of pricing, what are the trends that you're seeing in terms of pricing growth in your market? And given the realization that you've discovered, how high are they on an average compared to the pricing that you would have underwritten at?

[Gaurav Pandey, executive]

Thanks for the question. This is Gaurav here. See, essentially, what we've noticed right now that there is strong price growth in especially markets like NCR and Bangalore. In fact, if I were to just sort of give you a price stackup order, Gurgaon is seeing very robust price growth over the last 2 years, but continued even this year. Next would be Bangalore, then would be Noida. And I would say, finally, after we noticed Godrej Reserve launch in Mumbai, which is the largest residential sales by any developer, it's kind of also rerated Bombay in terms of its momentum.

So we are also seeing early days of good price growth in Bombay in our portfolio and also overall in the market. Pune is yet to see pricing relative kick off when I compare with other markets. but these are sort of the stronger markets, more from a forward-looking sort of approach, difficult to finally crystal gate. But if you generally look at the demand and supply hold, you can kind of derive certain estimates. So Noida, as you would appreciate, land supply is heavily restricted and there is complete lack of, say, for example, 3 BHK inventory, I would say that Noida in the near term should logically see price growth action.

In Gurgaon, if I were to say, I think periphery markets may not see as much of a price action, but Golf Course Road specifically should see price action because there is virtually no land supply and finally, some launches will be visible in the coming quarters. Bangalore, I think, is one of the strongest markets because the quality of land supply is limited because of the title issues of Bangalore. So whichever projects will hit the market would see reasonable growth, may not be as massive what we were seeing, say, in the preceding 2 years. But to some extent, I would say, maybe high single-digit kind of numbers should be visible in the next 6 to 12 months. Bombay, I'm quite bullish personally on -- because this market is seeing good offtake and also pricing growth very recently. And Pune, I would say, may not be immediate as much, but take 2 to 3 quarters because Pune tends to be a lag to Bombay. And if you see Pune is from a demographic point of very similar to what Bangalore is. So it's not taken up some pricing. So it's been sort of a laggard, but give or take, 2 to 3 quarters, we should see price growth there as well.

[Puneet Gulati, analyst]

And in terms of compared to the prices at which you have underwritten, how high are the realizations?

[Gaurav Pandey, executive]

I think one of the interesting things we managed to do is to do consistent business development in the last 2 years. And purely because of the cycle benefit, we've been able to enjoy significant price expansion. To give you some sort of a broad understanding, to give an example, Sector 146 Noida has 2 options that we had bought, about 20, 24 months back. We first launched the first phase last September, practically managed to sell it out in 3 to 4 months. The launch project of about INR 2,200 crores and we saw close to about 10% to 12% or thereabouts above our underwriting levels, but the residual inventory also saw price growth. But the second one that we launched, which was previous quarter saw again a price bump.

So essentially, in most projects, what we are noticing the market is giving you option. As a rule of thumb, we tend to either ensure at least that price expansion we do or it can be higher, which means that ballpark 10% to 15% from an underwriting in most of the parts of the portfolio, we've seen, of course, there are some projects we've seen even much higher price growth. And there have been some projects which could be something slightly lower than this. But ballpark, if you ask me 10% to 15% over-underwriting is what we've kind of consistently been able to achieve.

[Puneet Gulati, analyst]

Understood. And Secondly, on the construction cash flow side, while your collections have gone up, construction outflow hasn't really gone up as much. Should we assume a significant bump up coming in the second half of this fiscal?

[Gaurav Pandey, executive]

I think as you would appreciate that typically, construction is more -- the peak cost of construction happens to be mostly on the mid-stage and advance because initially, your maximum cost is about excavation, then some of these, especially in the north side, you have the filing that has to be done, which is quite time consuming, but not as capital intensive. And your construction speed significantly accelerates when you start hitting labs beyond atypical cycle. basically second, third, fourth slab onwards. That's when your construction tends to pick up.

So yes, you're right. We will see some sort of an acceleration in CoC, especially in the later part of the year. But as you would see that most of our projects are -- we had a very strong H1. And some of these CoC expenses in terms of peak would be noticeable towards mid part of next year. So starting from later part of the year, continue to the mid part of next year, you should see growth in CoC curve. But there is like finishing when the cost tends to be higher than core and shell with cost MEP, which is also a little higher than core and shell and core and shell usually is higher than excavation. There's always a sort of a CoC lag in terms of cash flow -- net cash flow line.

[Puneet Gulati, analyst]

Right. Understood. That's helpful. And lastly, if you can share the -- your share of sales booking value in the overall presales.

[Gaurav Pandey, executive]

I think we've probably shared. It's about 90.

[Rajendra Khetawat, executive]

First half of this financial year is around 93%.

[Gaurav Pandey, executive]

93%.

[Puneet Gulati, analyst]

93%. Okay. That's helpful.

[Operator]

The next question is from the line of Mohit Agrawal from IIFL Securities.

[Mohit Agrawal, analyst]

Congratulations on great set of numbers. So firstly, if you could touch base on the launch side, you've already done nearly 50% of your guidance. So -- and typically, second half is stronger just like presales. So if you could kind of tell us how do you see the second half? And would you beat your guidance there as well? And what would be the big projects that you're looking at in the second half?

[Pirojsha Godrej, executive]

Yes. I think our guidance, both on launches and sales always has some amount of buffers for projects slipping out for regulatory approval reasons, et cetera. So I think we are quite hopeful of surpassing our guidance on both counts. And the launch portfolio, I think both for Q3 and Q4 looks very full and exciting. Some of the big projects we hope to launch before the end of the year are the projects in Worli. We have a couple of projects coming on Golf Course Road in Gurgaon. We have a large project in Sector 44 in Noida, 2 or 3 launches planned in Bangalore, quite a few launches in Pune and also some in places like Kolkata and Hyderabad. So overall, I think a pretty robust launch calendar that I think gives us good confidence that we will see a very strong second half of the year from sales perspective.

[Mohit Agrawal, analyst]

So Pirojsha, Worli would be 3Q or 4Q, if you could specify?

[Pirojsha Godrej, executive]

Likely quarter 4.

[Mohit Agrawal, analyst]

Quarter 4. My second question is on -- you've been acquiring land and that strategy has been working well. And it is imperative for us to replenish the sales and to grow. But assuming that land prices have gone sharply up and probably we are somewhere near the peak, let's say, what kind of margin of safety do you want to build in your future land acquisitions in terms of margins? If you could kind of elaborate that strategy because if, let's say, the pricing growth stands or kind of declines, what kind of margin of safety do we have when we are underwriting the project?

[Pirojsha Godrej, executive]

Yes. No, it's a great question. And clearly, we're not at the exact same stage of the cycle now that we were 3 or 4 years ago. But at the same time, I think if you look at a typical cycle in India, which has been 7 to 9 years, we're probably in year 4 of that. So we actually do think the cycle like we have 3 or 4 more years left in it. But I think the land values have gone up and to some extent, kept pace with end property prices. So we do have to be very disciplined in terms of our land acquisition strategy. I think what we look at is that at today's price, not at any kind of price inflation or markets continue to do well. But just if we were selling the project base and using that price, can we achieve an IRR of at least 20% to 25% in the project.

And we think if that is achievable, then that's a project that makes sense to do. We don't look at assuming big price increases or anything when we're underwriting the project. And I think the good news is we are seeing a lot of opportunities that are meeting this threshold. There across regions, if you look at the kind of number of deals we've done last year. And of course, if we raise any capital, the idea would be to deploy that into other new deals. We are seeing a lot of opportunities that do meet this threshold still. But I think the IRR threshold of 20% to 25% is what we look at. And from a margin perspective, we've guided that we'd like 25% to 30% kind of EBITDA margin.

[Mohit Agrawal, analyst]

Perfect. That's clear. Just one last question. You've done INR 17,000 crores kind of a BD if I include the post second quarter acquisitions as well. What would be the total land spend on that? And how much of that land payment would be pending, which would come in future quarters?

[Pirojsha Godrej, executive]

So that land payment has been done in the month of October. So both inclusive of both would be around INR 1,000 crores.

[Mohit Agrawal, analyst]

This is the pending land payment, sir?

[Pirojsha Godrej, executive]

No, no. So this is for the 2 deals which we have announced post quarter end, that is INR 1,000 crores. And the pending land payment for the earlier deals would be around INR 1,500 crores for the deals which we have signed in financial year '25.

[Mohit Agrawal, analyst]

And sir, what would be the total land spend that would be in the range of 15% to 20%.

[Pirojsha Godrej, executive]

Yes.

[Operator]

The next question is from the line of Praveen Choudhary from Morgan Stanley.

[Praveen Choudhary, analyst]

Congratulations, very, very exceptional numbers up there. I just wanted to get a sense of any overheating you are seeing in the market. And Gaurav, you went through the entire spectrum of pricing trends. It seems like everything is comfortable. But to the extent that what are you looking for in terms of any overheating or concerns in the market, either in the land price or in the final sale conditions, that will be helpful.

[Gaurav Pandey, executive]

Largely, if you were to ask me, I see a very strong demand uptick. In fact, yes, you're right, there is some chatter here and there we do tend to read. But if you ask me purely from a ground position, we are seeing quite stellar numbers for ourselves. And early days, but even October, you would have seen some media articles of some competition also showing equally strong numbers. We, in fact, had a very good H1, not just from a growth point of view, but far higher performance than our underwriting. Now there is, of course, a degree of market overperformance will differ between what we saw 2 years back now from pricing and volume action. And within cities, I feel there will be sort of an evolution. So if I were to just give you some sort of a broad taste, I think I did mention some time back, periphery micro markets of Gurgaon is seeing good land supply. So we may see a volume action, but I think there will be sort of a price saturation sooner than later.

But Central Gurgaon doesn't really have any land supply barring a very handful of land parcel either with the government or maybe one of our peers. So that should see pricing action. Noida is practically, I already mentioned, is seeing a clear supply side issue from a launch perspective by anyone. So anything that is hitting the market is selling out very fast. I've already mentioned Bombay and the market. So I think chatter aside, if you just see what's happening on the ground and walk-ins, in fact, while the festive season has just started and we're somewhere between Navratri and Diwali and November usually is the higher momentum in my sort of history of launch that I've seen, but October is showing very encouraging signs, both by the kind of walk-ins we are seeing in our sites as well the product we hear from the market. So quite excited and quite strong market.

[Praveen Choudhary, analyst]

Very, very clear. And then one last question for me would be, when I look at the annual sale in terms of GFA versus the land bank that you have, and I assume, let's say, 20% growth per annum, you may have 5 years worth of land bank. Is that the right way to think about it when you're going to use your cash to replenish the land bank? Or do you want to have a longer land bank or a shorter land bank? Just wanted to get that sense.

[Pirojsha Godrej, executive]

Yes. I think in the short term, first of all, I think growth rates have been over the last couple of years, much faster than that 20%. While through cycle, we do think 20% is the number we'd like to guide to. I think there is an opportunity clearly in the near term to do better than that. We've seen both last year and this half very rapid growth rate. So we think it probably ends up quite a bit less than 5-year sales and therefore, kind of replenishment is perhaps more important than it looks if you look at the 20% growth rate.

[Operator]

The next question is from the line of Pritesh Sheth from Axis Capital.

[Pritesh Sheth, analyst]

Congrats on great set of numbers. Firstly, again, on the market environment on the absorption side, since you have had like a couple of successful launches this quarter, how do you read that versus what it was probably 6 months or a year back when -- where projects were literally getting sold out during launch. We still have a healthy absorption rate of 60%, 80% inventory getting sold out. But how do you read that? Is it a general supply side which is creating that kind of absorption run rate? Or you think that certain ticket sizes are going a bit higher and hence, we are seeing some bit of cooling off in terms of this fund sale. So just a comment on that.

[Pirojsha Godrej, executive]

We are not really seeing any cooling off in our view. And of course, even 6, 8 months ago, not 100% of projects were launching to sell out. So our view is the market remains very strong. We're quite confident several of our launches during the rest of the year, we will see close to sellout kind of responses. So actually, we're not -- there is a little bit of catch-up somewhere like Gurgaon about market cooling off. I don't think what we're seeing on the sales side is really indicating that a fall to us yet at least. And we remain quite bullish both in the very near term and medium term on the opportunity to continue this kind of trajectory.

[Pritesh Sheth, analyst]

Sure. And secondly, on the approval side of the business, have things started to recover in terms of time lines that used to take in terms of getting approvals because between like post elections, we saw some bit of slowdown, but have things picked up from there on? Or it's still as normal as it was before the elections?

[Pirojsha Godrej, executive]

I don't think we've really had much of a struggle. Of course, sometimes project by project, there can be an issue, but I don't think the election had any huge impact on us. If you look at the first quarter, which is right in the middle of the election, we had our best ever start to the year and sales have grown 90% largely on the back of a lot of launches coming in after getting the regulatory approvals. So I think from an approval and portfolio available for launch perspective, I think we're reasonably confident that the second half will be a very strong period.

[Gaurav Pandey, executive]

And just to build upon that, Pritesh, if you see our pipeline within -- just to give you this quarter example, places like Haryana, we've got the approval, right? Then we have projects in Mumbai and Pune, we've got the approval. So I think what probably a learning at least for us over the last few years is that these are predictable events in sort of a year. And you almost know during the target, which quarter would be a likely time where approvals could get struggle is how do you become more internally efficient so that you ensure that you can apply for approvals at the earliest possible. So I think this is sort of a process change we've done internally, which is kind of ensuring that to the large extent, we're able to mitigate this risk.

[Pritesh Sheth, analyst]

Sure. Got it. And just lastly, on the capital raise in terms of deployment, how much time you will take to deploy that? And second, while we'll probably reach INR 30,000 crore plus presales, what kind of market-wise target do we internally sense that we can generate for all our individual markets like NCR, we were at INR 10,000 crores last year. Do we have -- are we working on some market-wise targets for other key markets of ours.

[Pirojsha Godrej, executive]

I think we, of course, do have city by city and targets for each area, but it's not something that we necessarily want to guide towards at this stage. I think NCR crossing INR 10,000 crores. Last year was fantastic on that high base in the first half, they've been able to grow 70% and have a bunch of launches planned in the second half. So hopefully, we'll do even better than that this year. And of course, I think there's a healthy degree of competition internally between each of the zones, which are relatively separately managed. So we hope to see all our zones crossing this INR 10,000 crore mark fairly soon. And I think we have a portfolio that can get us there in places like Mumbai and the South zone, which is Bangalore, but also now Hyderabad, where we're hoping to launch a couple of projects this year. So I think good opportunities for growth and scale in each of these markets. And I think the sort of medium-term goal would be to establish ourselves as a leader in each of the individual markets in addition to kind of nationally.

[Operator]

The next question is from the line of Abhinav Sinha from Jefferies India.

[Abhinav Sinha, analyst]

Congratulations to the team on strong numbers. First question is on -- with the future pipeline of new projects that we are looking at, are we targeting the same sort of micro markets and the overall market? Or you are looking to expand into newer cities?

[Pirojsha Godrej, executive]

So I think the goal is very much to expand within the cities that we're already in. So from a group housing perspective, that would be largely Mumbai, NCR, Bangalore, Pune. We're open to opportunistically adding projects in Ahmedabad and Kolkata. Just earlier this week, we added a project for the first time in many years in Ahmedabad. In Q4, we entered the Hyderabad markets where we bought 2 pieces of land. We hope to launch both of those this financial year.

We'd first like to just get those launched, make sure everything we underwrote is kind of playing out as expected. And then as we'd expect, look to scale in the Hyderabad market as well. But these 5 cities of Mumbai, NCR, Bangalore, Pune and Hyderabad are where we'd like to make a lot of our investments on the group housing side. Of course, within these markets, I think one of the opportunities is to make sure we are present in as many different micro markets as possible so that we're capturing as much of the city level demand as we can. And the only exception to this is plotted development projects where we are open to a wider range of cities.

[Abhinav Sinha, analyst]

Right. Secondly, on -- I also see that some of your commercial investments has sort of reached the maturity level. Any thoughts on how we monetize that? Or you're looking to sort of hold on to those assets?

[Pirojsha Godrej, executive]

Yes. I think the idea is to gradually build a these generating portfolio for the business. I think while the lion's share of our focus for the next few years remains very much on the residential sector where we think both the overall size of the price is greatest, our right to win is probably higher and the returns that can be generated, we think, are the best because of the ability to have customers financing most of the development. But at the same time, for kind of the longer term, we do want to gradually build an income-generating portfolio for the company. And I think these projects help do that. So there's no plans to sell them or exit them. That's the question.

[Abhinav Sinha, analyst]

Right. And one last question on cash flow. So we are seeing higher margins in the project and also higher take rates, which are now north of 90%. So our sort Op-CF as percentage cash flow which is now around, I think, around 35-odd percent. Where does it settle in, say, a couple of years?

[Rajendra Khetawat, executive]

Yes. Most probably, yes.

[Pirojsha Godrej, executive]

From a margin perspective, I think what we've guided, Abhinav, is on the net profit margin, we'd like to deliver something above 15% through cycle. Of course, it might go a bit higher than that when some of these projects have seen a lot of margin expansion in revenue recognition. But I think that's kind of roughly what we're targeting. I think this OCF margin is a good shorthand thing to look at, but it's not something that we're targeting a specific margin. It actually can vary quite a bit depending on construction milestones in particular projects and things. So I think the kind of reported earnings margins we're looking at is what I indicated. And we're seeing, I think, very, very healthy growth in collections and operating cash flow, we expect to grow ahead of that.

[Operator]

Next question is from the line of Parikshit Kandpal from HDFC Securities.

[Parikshit Kandpal, analyst]

Congratulations on a great quarter. So my question is on the launches. So if you can help us understand when is the Ashok Vihar launch now? And also, if you can give some more color on the Vikhroli land parcel after the family settlement, how do we see it, whether new launches will happen there? And what are the time lines of launches for Vikhroli land parcel?

[Pirojsha Godrej, executive]

Yes. So on Vikhroli, we have a project that we launched a few months ago. So I think focus for the next few months will be on selling that project. I would be hopeful that next financial year, we can have a new launch in Vikhroli. And Ashok Vihar is also now looking like a next financial year launch.

[Parikshit Kandpal, analyst]

Okay. The second question is on the fundraise, which you have taken the resolution. So if I see the MMR portfolio, so last year sales which we had done, the average realization was about 16,000, maybe on carpet 24,000, 25,000. So we are really not there on the premium end of the MMR, which is really large and where as a brand, GPL can have a larger market share. So how do we intend to plug that gap on the premiumization of the MMR portfolio because that is what will give us bigger margins. So if you can give some more color on this fundraise and how do you intend to deploy it? Are you looking to underwrite large land parcel format, maybe 50, 60 acres kind of land parcels where we can have maybe 10-, 11-year kind of a development, which can be premiumized. So if you can give some color on that, that will be helpful.

[Pirojsha Godrej, executive]

So, first of all, in MMR, there's already been quite a bit of premiumization of the portfolio. We have existing projects currently in the market in like Mahalakshmi, we'll later this year, be launching our Worli project. We have a project in Carmichael Road. So there are several kind of premium projects that hopefully will come to market soon, including Bandra project that we hope to bring to market next year. But I think the opportunity is across price points. I think something like our launch Godrej Reserve that Gaurav was talking about earlier, where we launched in Q4 of last year, sold brilliantly well and is a very attractive project, both from a total scale perspective as well as margin.

So I think we have, I think, struck an interesting price point in Bombay. Our goal isn't to do only luxury developments, which have their own drawbacks. So while the margin might be attractive in some cases, I think that is not necessarily the end of price segments that we're most attracted to. But I think the visibility for Bombay business development looks very strong, and we certainly hope to deploy a considerable part of any money we raised into our Mumbai portfolio.

[Gaurav Pandey, executive]

And if you see relative to our average price per square feet, I'm seeing more at a portfolio level because portfolio is an average of markets like Pune, Bangalore, NCR and of course, Bombay, I would say portfolio average price would be much higher for Mumbai portfolio per se because the typical presence that we have, if you see especially in the last 18 months, we've had a lot of projects apart from what Pirojsha added, say projects like Wadala, we'll have something. We have in Bangalore, we have Vistas and Vikhroli, all of these are significantly premium projects from a pricing point of view.

[Parikshit Kandpal, analyst]

Gaurav, my point was more from like larger land parcels, which may come up for option of bidding. That's why some of the peers are raising large capital. So are we open to underwrite large like INR 1,000 crores or INR 1,500 crores kind of single land parcels, so which can give like a higher economic interest as well as long-term development potential because it's hard to get land parcels, larger land parcels in Mumbai, there is limited window. And since we're raising capital more -- so my question was more from...

[Gaurav Pandey, executive]

I would say that there's no reason we won't really participate in from the [indiscernible] from the perspective, we are saying definitely we will participate. And I think one of the unique strengths we are having over competition, especially in markets we are present is our ability to sign check size between INR 500 crores to INR 1,000 crores or even beyond if we see the opportunity is right. So of course, we'll do that. The only thing I'll say, Parikshit, our lens of doing this may not necessarily be what sometimes from a check size for competition could be the land banking. Unless we are very, very certain about the strategy, we prefer to be more about capital churn play. Having said that, we would, of course, evaluate any and every opportunity. But yes, we can sign big checks. Yes, we would love to scale up the Bombay portfolio significantly beyond what it is delivering. But the approach will be more about how quickly can we turn on these projects and make as much of efficient use of capital. Does that answer your question?

[Parikshit Kandpal, analyst]

Yes, yes. So one question to Rajendra. So Rajendra, I mean, you touched upon that INR 1,000 crores spending from the BD done in Q3 and INR 1,500 crores for the rest of it. So entire land payment financial year-to-date for all the land parcel or pending land payments will be about INR 2,500 crores?

[Rajendra Khetawat, executive]

Yes, INR 2,500 crores to INR 3,000 crores, including Ashok Vihar and other stuff.

[Parikshit Kandpal, analyst]

Okay. And just last, if I may. So how has been the approvals in Bangalore? We have been hearing there has been significant delay in approvals in Bangalore. So if you can -- Gaurav, if you can touch upon that, whether the approvals are coming in or things have normalized now?

[Gaurav Pandey, executive]

I think for us, it's been coming quite consistently. I mean, approvals in India has been a bit of a struggle typically from the last 5 years. So I won't say any market is easy or difficult relative to the trend. But we see our projects like in Q1, we were able to bring good escapes into the market, which turns out to be INR 3,150 crores of being the highest for us. And similarly, we've been able to see for this quarter, approvals are on track. But pressure is not very frankly, geography-specific challenge. And for us, it's more like sort of a constraint which we see. And the best one can do is to ensure that, like I was mentioning, ensure that your design processes are very efficient. But nothing peculiar to Bangalore for us that we see.

[Operator]

The next question is from the line of Kunal Lakhan from CLSA.

[Kunal Lakhan, analyst]

Just on the fundraise, currently, your promoter stake is about 50-odd percent. And post this fundraise, it could go below 50% or 47%. So what's the long-term view on maintaining the promoter stake at?

[Pirojsha Godrej, executive]

Yes. Thanks. I think we, of course, not like to dilute much below the levels that we'd be at post the fundraise if we did go ahead with that. So I think the idea would be, again, to give a huge boost to growth. We think the kind of collections that will be generated both from the sales that have already happened, but the sales that we'd also be locking in through this new round of deployment will be, frankly, quite massive and will allow us to do a lot through our operating cash flow. So we don't see any further reason for capital raising. Even this one, to be honest, if we were growing at the 20%, 30% kind of growth rate, I don't think there would be a reason for the fundraise. The growth has been much faster in the last 3 years, and we do see an opportunity to deliver another couple of years of very fast growth. And that's kind of the logic. But certainly, we wouldn't see any likely fundraising after this round. There's certainly no plans for any further dilution.

[Kunal Lakhan, analyst]

Sure, sure. And on the fundraise per se, right, you did answer on the utilization of these funds. But just wanted to understand in terms of the 4 markets that you spoke about, right? Just from your opening commentary, you sounded more positive in terms of pricing, I'm saying relatively towards, let's say, Noida and Gurgaon versus, say, Bangalore, Mumbai or Hyderabad. So should we assume that the incremental deployment of capital would be skewed towards markets like Noida and Gurgaon?

[Pirojsha Godrej, executive]

No, I don't think so. I think, Kunal, one of the big benefits we think we have of having a truly national platform is that we can choose not -- we don't have to choose to be just in one city or the other. We can choose project by project where we think the best returns on a risk-adjusted basis are possible. And so I think we like to have that flexibility. So actually, we're not raising the capital saying that 20% will be in Noida and x percent in Pune or anything like that. We have a large set of opportunities available that we're seeing in various markets. I think which of those close will depend on kind of where we're able to structure the most attractive outcomes for ourselves. But no, I don't think we're viewing the NCR market as more positive than the others. If anything, I think some of the markets that haven't quite seen that full run-up in pricing yet may offer a lot of attractive opportunities. So certainly, Mumbai and Pune would be very much part of the plan for this capital raise as would Bangalore and NCR.

[Kunal Lakhan, analyst]

Very well understood. One last question is in terms of buyer profiles, especially for Gurgaon and Noida projects, if you can give some color on what are the profile of the buyers and how many of them typically take mortgages?

[Gaurav Pandey, executive]

Thanks for the question. As a typical rule of thumb in most projects that what we get to see from mortgage is about typically 50% to 70% customers tend to take mortgage in the project. And again, Noida market has always historically been more end user driven because if you see the supply itself is constrained. Gurgaon has a sort of interesting history where different participants operate, right? And I'm not talking just right now, I'm talking more of the market conditions, which we have seen the evolution from the last 20 years. So you have end users who are very product-driven, then you have investors which are very long-term rental income related. Then you have investors which have sort of a thought of getting capital gain in 4 to 5 years, and then you, of course, have speculators who operate. I think -- and different developers also tend to have a different strategy on which part of the market share they want to sort of get.

If you generally see in Gurgaon portfolio, we've done some crazy blockbuster sales, but we intentionally never pushed for a complete sold-out strategy. And the reason was very simple that we wanted to ensure that the sales funnel can try and absorb as much of end users by making certain practices which are sort of prohibitive and less attractive for investors. And simple examples are like the way we do channel incentives they're clearly the lowest in the market. And the idea that there is no misselling and no -- almost like not the preferred partner for some of them from a brokerage point of view, but more from a product point of view, people who want to sell our products to customers who want to stay and enjoy the properties. So that's one example, the payment plans that we take to design.

If somebody wants to buy more than 1 unit, there's a sort of process defined which actually lines up to my table. And you can well imagine the probability of that reaching to me after so many approvals. So idea is to ensure that you attract the lion's share of it. And yes, sometimes what may happen is that on the D-Day, you may not say sold out, but look at Zenith as an example for us. We sold INR 3,000 crores in Q3. And by now, we sold another INR 1,000 crores at incremental pricing and better buyer profile.

So I think these are things that you put in place. But yes, the market will have different types of people who would have different types of needs for buying out of products, from our end users, from our investors, from our speculators. We just feel that right now, the bulk of the market is there, especially in different micro markets, like I was mentioning some time back, Golf Course Road, for example, is a pure end user market because that's a city -- that's a part of the city which has complete infrastructure in place that has probably one of the highest rental per square feet of commercial office space of North India, so has a very different TG. But yes, if you go to 20, 30 kilometers down the city, you will have different type of developers with different type of customers, investors and the like.

[Operator]

[Operator Instructions] The next question is from the line of Puneet Gulati from HSBC Bank.

[Puneet Gulati, analyst]

So Pirojsha, this one is for you. Did I hear it right? You said that if you were only anticipating 20% growth from current levels, there wouldn't be a need for a fundraise?

[Pirojsha Godrej, executive]

Yes.

[Puneet Gulati, analyst]

So essentially, with fundraise, we are targeting much higher. Okay. Secondly, can you also give a sense of what kind of gross -- you've also added a significant amount of gross cash now close to INR 6,000 crores, and there will be -- what part would be stuck under RERA? And when do you expect some of that to also unwind?

[Pirojsha Godrej, executive]

Sorry, can you put back for me.

[Puneet Gulati, analyst]

So you have large -- it's almost INR 6,000 crores of cash in your books now. This has grown up significantly on Q-on-Q. How much of it is stuck under RERA? And when do you expect it to get unlocked?

[Rajendra Khetawat, executive]

No. So this is a continuous RERA cash getting accumulated and released as and when the progress. As of now, we have around INR 3,000 crores of cash flying into RERA account, which will get utilized for the construction and it will get released as and when the OCs will be received -- different stages....

[Gaurav Pandey, executive]

Percent completion.

[Rajendra Khetawat, executive]

For the completion percent, yes.

[Puneet Gulati, analyst]

Yes. And is there something in JVs as well, which is still yet to come back to the books?

[Rajendra Khetawat, executive]

There may be some amount, but not a very significant because now most of our JVs are at the fag end or almost completed.

[Operator]

The next question is from the line of Sukant Garg from EQUIBLE RESEARCH PRIVATE LIMITED.

[Sukant Garg, analyst]

First of all, congrats on the numbers. I would like to ask that in how many projects that we missed basically and how many projects out of the total we missed the original schedule deadline?

[Rajendra Khetawat, executive]

Sorry, the voice is not clear. Can you please repeat?

[Sukant Garg, analyst]

Yes, sorry. So am I clear now? Am I... Hello?

[Rajendra Khetawat, executive]

Slightly better, but it's a little muffled but please continue.

[Sukant Garg, analyst]

Okay. Am I clear now?

[Rajendra Khetawat, executive]

Yes, yes.

[Sukant Garg, analyst]

Okay. So I just want to ask that in how many projects we missed the original schedule deadline? And what is the average time of that miss -- average time of that, how much delay of the deadline is?

[Rajendra Khetawat, executive]

So you're basically saying what's the typical schedule time line and how it happens in operations. That's the question?

[Sukant Garg, analyst]

Yes.

[Rajendra Khetawat, executive]

Got it. See, actually, it depends upon the -- with the -- quite a few factors like one is how big is your land parcel because that determines the site logistics, how many basements/podiums you may want to have? And what's the typical height of the building, right? So a rule of thumb is that for a typical building, it can take as less as 3 years, can take as max as 5 years. Usually, I'm saying 80% of the projects will be typically in this, again, like the variables I mentioned to you, of course, is more highrise is capable like a 60, 70 storeys would, of course, be higher. And if you go to like a 10, 15 storey, it could, of course, be far lower. But rule of thumb, you can assume that with different degrees of basement configuration and need for filing and height of the building, thumb rule will be 3 to 5 years.

[Sukant Garg, analyst]

So my question is around how many days of delay that we usually have in completing a project?

[Rajendra Khetawat, executive]

Generally, our estimation wise, we are fairly -- bulk of the portfolio do not really see, frankly, sort of a typical delays. But it's also a bit of a learning for us that in some markets like specifically talking about NCR where National Green Tribunal has certain guidelines which have started coming in the last 3-odd years. And we did, of course, launch projects in the next 7, 8 years. That time, we did not envisage that there will be [indiscernible]. I'm assuming you're familiar with the regulation.

So when the pollution tends to pick up, there are regulations defined when you need to kind of prescribe and halt construction. And what it does is you not only lose those many days, it takes time for you to remobilize and again speed up, right? So -- but in the new projects, we tend to now budget for the time in terms of our time line planning and submitting externally according like that. So barring aside the typical delays, I would say, a very handful situations we have seen projects getting delayed, but more or less, every project gets delivered on time.

[Operator]

Ladies and gentlemen, due to time constraints, we have reached the end of our Q&A session. I would now like to hand the conference over to the management for closing comments.

[Pirojsha Godrej, executive]

I hope we've been able to answer all your questions. If you have any further questions or would like any additional information, we'd be happy to be of assistance. On behalf of the management, thank you once again for taking the time to join us today.

[Operator]

Thank you. Ladies and gentlemen, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

[Pirojsha Godrej, executive]

Thank you.