Godrej Properties Ltd

NSE:GODREJPROP

Earnings Call Analysis

Godrej Properties Reports Record Q3 Bookings

In Q3 FY24, Godrej Properties celebrated its most successful quarter historically, with new bookings surging 76% year-over-year to INR 5,720 crores, surpassing its annual bookings guidance. The company already beat its full FY23 bookings in just 9 months and expects to exceed the projected INR 14,000 crores for FY24. A major win was the Godrej Aristocrat project, which alone garnered over INR 2,667 crores. Cash collections and net operating cash flow grew by 43% and 45% to INR 2,411 crores and INR 798 crores, respectively, in Q3, while net profit for the nine months soared by 60% to INR 254 crores. With the strongest project pipeline to date, they're set to enhance bookings and earnings growth and are on track to meet the INR 10,000 crores cash collection guidance for the fiscal year.

Outlook on Business Scale and Presales Growth

The company has seized the moment to enhance its business magnitude, achieving a presales growth rate of 50% in the previous year. This growth trajectory is not expected to continue at the same pace over the medium term, with the company targeting a more sustainable growth rate of around 20% going forward.

Cash Flow and Business Development

There is a high confidence in the company's robust cash flows over the next 12 months. The company has also seen significant activity in acquisitions, with a total of seven acquisitions in key areas, leading to a robust pipeline of new launches over the next few quarters.

Strategic Focus on the Southern Market

A targeted investment strategy is in place for the Southern region, a high-performing market, indicating a continued focus on achieving substantial growth. The company has witnessed its turnover in this region grow significantly over the past financial year and expects to continue this trend.

Financial Guidance and Spending

The company has set a full year target of INR 15,000 crores worth of Gross Development Value (GDV) without envisioning a significant spike in land acquisition spending for the fourth quarter. Moreover, the quarter is anticipated to be strong for operating cash flow generation due to a large volume of planned deliveries.

Revenue Recognition and Project Launches

Revenue recognition from various projects requires a detailed, project-by-project analysis. Approximately INR 1,900 crores have already been invested towards the acquisition of the INR 8,000 crores of GDV targeted.

Mumbai Market Expansion and Presales Growth

There's a strategic move towards scaling up in the South Mumbai market with new projects and launches, supported by positive sales performance in recently launched projects. The intention is to continue with the momentum and diversify the offerings, maintaining a balance between premium and mid-income projects.

Operational Excellence and Profitability

With the company's scale-up, emphasis is being placed on ensuring their operational capabilities match rapid growth. A focus on outright ownership of premium projects helps maintain a balance between sales value and operational intensity.

Debt Strategy

The company operates comfortably within a gearing ratio (debt-to-equity ratio) range of 0.5:1 to 1:1, with the higher end equivalent to just under INR 10,000 crores. Even with temporary deviations, there's confidence in reverting back to this range, showcasing a prudent approach to managing leverage.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to the Q3 FY '24 Earnings Conference Call of Godrej Properties Limited. [Operator Instructions] Please note that this conference is being recorded.

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

[Kshitij Jain, executive]

Yes. Thank you. Good afternoon, everyone, and thank you for joining us on Godrej Properties Q3 FY '24 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.

[Pirojsha Godrej, executive]

Good afternoon, everyone. Thank you for joining us today. I'll begin by discussing the highlights of the quarter, and we then look forward to taking your questions and suggestions.

The demand for homes in India is at its highest levels historically and has gained further momentum during the quarter. The positive market opportunity is driven by the overall strength in India's economy, the cyclical upturn in India's residential real estate market that meets the modern homes with better amenities as well as consumer preference towards Tier 1 developers.

The RBI's upward revision of financial year '24 GDP growth of close to [ 7% ] during the quarter, reiterates India's position as the world's fastest-growing major economy. The government's continued focus on housing for all and urban infrastructure combined with the fiscal prudent evidence in last week's union budget, strengthen our condition that the real estate sector will continue to do well in the years ahead.

The third quarter is Godrej Properties most successful quarter ever in terms of new bookings with year-on-year growth of 76% to INR 5,720 crores. This was 14% higher than our previous best ever quarter in quarter 2 of the current financial year. These consecutive record breaking quarter's ensured that our 9-month financial year '24 sales have already crossed the booking value registered in all of financial year '23, which is our previous February. We are confident of building on this momentum and going well passed our annual bookings guidance of INR 14,000 crores for the full financial year.

This strong growth can be attributed to an extremely strong response by customers to some of our new launches during the quarter. Godrej Aristocrat in Sector 49 in Gurugram with GPL's most successful ever launch, achieving a booking value of over INR 2,667 crores from 1.35 million square feet of area sold. It is noteworthy that the total expected booking value for this project has increased by approximately [ 50% ] from the time we acquired it a year ago.

Godrej Ananda in Bengaluru was another project, which achieved more than INR 500 crores booking value during the quarter. Godrej Avenue 11 in the Mumbai Metropolis division was launched in September 2023 and has achieved a booking value of INR 687 crores within four months of launch. We are pleased to see the strong customer response to new launches across all the cities we are present in.

Cash collections and net operating cash flow, respectively grew by 43% to INR 2,411 crores and 45% to INR 798 crores in the third quarter. For the nine months of the financial year, we recorded cash collections of INR 6,743 crores and net operating cash flow of INR 1,726 crores, representing a growth of 20% and 24%, respectively. We remain on track to achieve our guidance of INR 10,000 crores of cash collections during the financial year.

From a business development perspective, we added 1 group housing projects in Bangalore and estimated booking value of INR 1,250 crores. We now have our strongest ever project pipeline that can deliver robust growth for the next few years. Most important objectives for the company in 2024 will be to launch all of our recently added projects. We believe this will dramatically accelerate our bookings and earnings growth trajectory in the years ahead. We will, of course, continue to do targeted business development to plan both in our current portfolio and ensure continued growth beyond the next three years.

Our reported earnings for the third quarter were healthy. Those are not [ muted ] because we did not have any project completion during the quarter. Our total income increased by 43% to INR 524 crores and net profit increased by 6% to INR 62 crores. For the nine months of the financial year '24, total income has increased by 126% to INR 2,410 crore, EBITDA increased by 51% to INR 548 crores and net profit increased by 60% to INR 254 crores.

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]

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Puneet Gulati from HSBC.

[Puneet Gulati, analyst]

Congratulations on good details. My first question is on NCR market, which has become a substantial part of your sales bookings number as well. The market pricing also has been quite strong. What are your thoughts on NCR market? Do you think this kind of run rate of almost INR 2,000 crores, INR 3,000 crores that you are doing from -- on a quarterly basis from NCR will be sustainable. And how do you expect the market to absorb such high price inventory going forward?

[Pirojsha Godrej, executive]

I think the NCR market has performed very strongly. We've typically noticed NCR, I think in all directions of the market factors seems to be leading the way. I think last time, the down cycle there our costs went quite sharp. We're seeing the upcycle also of being first and quite sharp. Certainly, our portfolio in NCR we think will support strong growth over the next few quarters. We've launched and I think the reason to the very positive momentum we've seen in the past two quarters in NCR is we've had a big launch each quarter, one in Noida, 1 in Gurgaon. We last year added 5 projects in Gurgaon, of which only one has so far been launched. So we hope to have one project launch in Gurgaon this quarter of this calendar year, including the current one.

We also have a second part of the Noida project that we added last year to launch again, which we hope to launch this quarter. While unfortunately, it's been quite delayed, but we certainly hope to see Ashok Vihar launched in the first half of next financial year. And I think that will be another big boost to our scale in NCR. So certainly, we do feel we have the project portfolio to maintain strong growth in NCR over the next couple of years and are very happy with the kind of response we're seeing there. So we'll also be looking at new business development opportunities where those make sense.

I think the level of price increase and sort of key business in the market in NCR is something we have our eye on. But my sense is, while we won't see that trajectory continue. There has been a kind of reset in the market to the higher price points. Again, the down cycler NCR was also quite severe. So the base from which prices are going up was reasonably low. So our best sense is we won't see the kind of price increases we've seen over the last year, they're very sharp on an ongoing basis, but probably more flattish to kind of moderate price growth going forward, but we see as of now, no concerns on the demand being overly driven by investors and end users not being interested and so forth.

So I think we remain quite confident on the performance of that market. So certainly, we'll keep a close watch on how it continues to perform.

[Puneet Gulati, analyst]

Understood. That's helpful. Secondly, on your cash flow perspective, when do you think will the firm reach a situation where operating cash flows will actually start exceeding the business development related expenses. Or do you think that is something that one should not be aspiring for?

[Pirojsha Godrej, executive]

Look, I think we're already at that pace. I think this year, we could be in a state where if we do business development, I hope that is sufficient to kind of replace what we're selling. Operating cash totaled I think more than covers all the requirement.

I think we have intentionally over the last few years, have a onetime reset given the opportunity we saw, particularly a few years ago when the cycle was -- has still not taken off, our land prices were still quite attractive. We saw an opportunity to completely reset the scale of the business, and we delivered presales growth of 50% last year. We think that's possible again this year. So clearly, that will require disproportionate investment more than the cash flows of a smaller base can pay for. But I think as the cash flows from our sales, it starts coming in, which we think have already started, of course, but will gather considerable pace through this year, we do expect to be in that position.

[Puneet Gulati, analyst]

Okay. So when should we see it exceeding the land approval-related cash flows -- out flows of this year FY '24.

[Pirojsha Godrej, executive]

Can you come again.

[Puneet Gulati, analyst]

I think -- when should we expect the net operating cash flows exceeding the land-related and approval related outflows, the INR 583 crores number this quarter versus the INR 1,250 crores of approval. Should we expect that next year or the year after?

[Pirojsha Godrej, executive]

Yes. Again, I think it is a function of how much business development is done. I think if you look at the booking value that we achieve in a year, we -- if we only do business development roughly equal to that, I think we will already deliver this, with what you asked in 2024.

If we do for individual group all business announcements that could of course change and what could get us to more business development if sales momentum is even stronger than we'd anticipated, and therefore, the requirement to replace inventory is larger than we initially anticipated. But I think we are quite confident that cash flows over -- in the next 12 months will be extremely robust.

[Puneet Gulati, analyst]

That's very helpful. And lastly, if you can comment on the competitive intensity in the business development processes across various markets.

[Rajendra Khetawat, executive]

Thanks for the question. Essentially to see in the business development side, most of the leading players are in a stage of [indiscernible] -- which is basically launching the project. In some geographies, of course, there is renewed interest because some of our peers are doing well. But I don't see as much of a competitive landscape on the BD side, like we would say probably say 1.5 years back.

[Operator]

Our next question is from the line of Pritesh Sheth from Motilal Oswal.

[Pritesh Sheth, analyst]

Yes. So just continuing on the NCR question. The first question, which previous participant asked. So we have roughly 2, 3 more projects now, I mean, in fact 3, 4 more projects now in NCR including Ashok Vihar. So pretty much sorted for next year's growth. Now considering that NCR is contributing 50% to our overall presales in first nine months, now how do you see the visibility of project additions in these markets because whatever you acquired in last one or a couple of years, a few of the acquisitions where a few of the land was acquired through auctions. So how is the visibility right now? Is there enough opportunity to acquire -- keep acquiring projects to fill that gap, which will happen over the next 1, 1.5 years?

[Rajendra Khetawat, executive]

Thanks for the question. If you see -- I think the question is more about replenishment of inventories NCR specifically. We have done a say about 5 acquisitions in Gurgaon and we had done 2 acquisitions through auction in Noida. Out of these 7, 2 have already got launched and very successfully. And we have -- just by looking at the pipeline, like 4 to 5 quarters, every quarter, you would see a launch or 2 in NCR. And some of these launches have significant inventory logged in, like there is a project which should get launched hopefully in this quarter, which is quite sizable, probably one of the most sizable projects we've done in Gurgaon in the recent times.

So one is that is there a dire need to replenish inventory right away? I don't see that. But is there an opportunity to evaluate things at the right valuation, of course, yes. So that is one. Second is, I feel that looking at how the government is shaping up, we would continue to see auctions coming up in NCR in the next couple of quarters. And we would, of course, evaluate them on valuations. So you see that the valuation is very attractive and we see opportunistic investments leading to more value creation for us, we'll, of course, participate. But it is not driven anymore by a necessity. It's about -- more about can we take the opportunity higher.

[Pritesh Sheth, analyst]

Yes, sure, sure. That's helpful. And just on your presales guidance now, obviously, it seems like you would reach your full year guidance and with launches coming up, what is the kind of expectations now we are building in for this year?

[Rajendra Khetawat, executive]

While you will not be given a specific guidance, but largely to see the previous two quarters, we've been kind of have achieved a run rate of INR 5,000 plus crores is something directionally we would want to maintain that in quarter 4. But frankly, this could be better or something around that. So not giving a specific number, but this is something we would logically be delivering, something in that range.

[Pritesh Sheth, analyst]

Sure. And lastly, in Bangalore, which is a market where you are targeting a few more acquisitions and try to fill that gap, so any outlook there? Are opportunities coming in line to your expectations? And so any update on that.

[Rajendra Khetawat, executive]

See -- if you see south zone internally as we enabled it, is one of a very interesting high-performing markets from a inventory sales point of view. FY '22, it was INR 700 crores, which became INR 2100 crores, INR 2200 crores previous financial year and it is about to reach a similar number in this financial year and will significantly be that of last year. So yes, you're right, there's a very targeted investment strategy for South. We've just done one acquisition in Yeshwanthpur and the endeavor is that in coming months, you would see a couple of other acquisitions in South India.

[Operator]

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

[Praveen Choudhary, analyst]

I have two questions. The first one is the presales, which I must congratulate these numbers are very, very, very good and exceptional. So you mentioned the last two years, you've been growing at 50%. This year should also grow 50% to 60%. I don't think market is growing at that level. So I just wanted to understand the sustainability of presales growth even in FY '25 and '26, considering market continues to be strong, how should I think about it? Is that 20% annualized number, a reasonable number and then you eventually do 50%, 60%? And what drives you to continue to beat the market or your peers? Is the first question.

And the second question is related to the gearing and you have 70% gearing right now, net gearing. And I just wanted to understand if there is a number that makes you comfortable? Or for a short period of time, you can handle even higher because you know that cash flow will eventually come back.

[Pirojsha Godrej, executive]

Thanks very much. The growth, I think, obviously, we are very happy to see two years back to back like roughly 50% growth. I clearly don't think those kind of growth rates will be sustainable over the medium term. And I think we look more towards ambitious a reasonable steady state growth in the range of around 20% on an ongoing basis.

But I think the opportunity we saw was kind of reset the sale of the business during the downturn by raising capital using that to invest when the timing was right we felt in acquiring lands, and we did a lot of outside plant acquisitions with that same logic in mind that we are acquiring at the right time and be best to maximize our economic interest in the projects that are going to get developed through a rising market. And I think that's playing out as we have expected.

We certainly will continue to aspire for rapid growth. It could be some years like we've had the last couple of years, but probably over a medium-term perspective, roughly 20% is a sensible assumption and one we can hopefully create some positive surprises on.

From a gearing perspective, we've indicated that we like to maintain a range of 0.5:1 to 1:1. I think -- we think that is the range where we are best capitalizing on the scale of opportunity available in the real estate market in India today while also managing our balance sheet prudently.

That said, as you rightly pointed out, this is not a [ hard in cost gate ] where we can't go above or below this. We have, since the last couple of years, under this level as we raised equity with the intent of disproportionate investment as that investment has happened. We've now entered the range that we'd like to operate in.

I think what I would say is that if we were getting towards the higher net of that range, we would look quite carefully at what we need to do to further strengthen operating cash flow to make sure that we don't go too far past that. But certainly, if we see very strong cash flows around the corner and feel that there are also good business development opportunities that we should see, we would be okay with temporarily going beyond that range as well.

[Praveen Choudhary, analyst]

That's very, very clear. If I could follow up with one more question, if that permits. The one question is about ASP expectation. Clearly, market is hot, things are very well, and is doing very well. But the concern is if the price go up too much too fast, then either we will get the speculators in the market or basically, affordability will take a hit. What are you seeing in the market at this point in time? And are you worried that if this continues, maybe it will become less affordable in the future? That's all I have.

[Pirojsha Godrej, executive]

No. Look, I think the real estate sector in India globally has been prone to kind of a cyclical nature. And honestly, I'm not convinced with anything that any individual developer can do to change the nature of that cyclicality. And the reason for the cyclicality is also quite clear. It takes from a supplier perspective quite a lot of time to respond to what one is seeing in the market. Therefore, bad market developers offering any supply and once the demand picks up, inevitably get into a situation where supply is a bit short because developers haven't been actively planning for new developments during the downside. So that in turn leads to the kind of price increases we're now seeing because for a respond to that and supply increases and you then have the next leg of the cycle.

So my self view is that as an individual developer this -- what a sensible thing to do is to try to understand to the best of our abilities where we are in the cycle, what is the most likely outcome, understand that there cannot be certainty on this. We have to be prepared for all eventualities, make sure that our balance sheet is strong enough to expand the downturn when impact take advantage of them and that we have the portfolio scale to fully maximize the opportunity in the upturn.

I think if you look at even the largest developers in India, including us and other leading peers, would still have mid-single -- low to mid-single-digit market share. So I think the ability to kind of determine pricing for the last, it is not as strong as one might imagine, and it is a little bit of responding to what we see in the market.

And clearly, I think some markets are seeing very sharp progress. Again, which is nothing that comes as a great surprise to us. This is very typical of the earlier up cycle that we're currently in. I think we should also be quite clear that 4 or 5 years from now, if [ you see is a ] good guy, we should expect to see the cycle turn again.

Now again, that should move up or down by two-folds for various factors. But the basic cyclicality of the sector, I think is here to stay. And I think it's incumbent upon individual developers to figure out how to best maximize the opportunities in each leg of the factor and maintain a balance sheet that can withstand any surprises that come on.

[Praveen Choudhary, analyst]

Congratulations for very strong results, operating cash flow collection lines, et cetera. So good luck.

[Pirojsha Godrej, executive]

Thank you.

[Operator]

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

[Kunal Lakhan, analyst]

My first question is on your business development target. We have retained a full year target of INR 15,000 crores worth of [ GDV]. But does that mean that in Q4, we would see some high spend towards the land acquisitions?

[Pirojsha Godrej, executive]

Yes, I think we will reach that target, I think we've already done about INR 8,000-odd crores or INR 6,000 for the booking value to be locked in and I don't anticipate a huge spending into that. Yes, I think we will be doing some other business development this quarter.

I think it's also worthwhile to note that we have a large -- if you look at our deliveries there's also a large amount of deliveries plan during the quarter. Typically, there's quite a bit of cash flow linked to growth deliveries. So we should also be a very strong quarter for operating cash flow generation.

[Kunal Lakhan, analyst]

Sure, sure. And just a related question on that is like if you look at this year, you'll -- if you increase your sales velocity by 50%, you'd be obviously selling more than what you have -- what you'd be acquiring in terms of value, right? So in that sense, how should you look at -- how should one look at the business development goals, FY '25 and beyond, would it be significantly higher than our FY '24 guidance that we have been giving?

[Pirojsha Godrej, executive]

I think, Krunal, probably appropriate to come back to you on the next quarter as we see how the year unfolds from a total sales perspective, what amount of business development is locked in. But I think the overall philosophy of the company has never been around or trying to create multiyear while beyond which we see immediate loan capability and nothing about that has changed.

Of course, at the same time, we don't want to be in a situation where life of inventory slows down of course. So I think getting that things right, is something we will fine tune on an ongoing basis and I think it will be well in a better position to share thinking for next year once we see kind of end of the year both business development additions as well as total sales there which can give us a good indication.

But I would say that especially for the next couple of years, the portfolio is looking very strong. We do think that even without new building development this year, next year, and to some extent, beyond that is looking pretty strong from a bookings perspective. So we don't think that it's immediate urgency. But certainly, as the market is responding so positively to new project launches, we will have to think about replacing inventory perhaps a little bit more aggressively than we would have been 6 months ago. But we're also seeing quite a lot of opportunity on the BD side to feel that as and when we decide to increase the pace, so the opportunities we do feel are available.

[Kunal Lakhan, analyst]

Sure, sure. So just a follow-up bookkeeping question on BD. How much did we spend on land acquisition pertaining to this INR 8,400 crores of GDV that we acquired?

[Pirojsha Godrej, executive]

Sorry. Sorry. Come again, Kunal?

[Kunal Lakhan, analyst]

How much we spend towards land acquisition, especially for this INR 8,400 crores of GDV that we have acquired?

[Rajendra Khetawat, executive]

So for nine months, we have spent around INR 4,300 crores of total outflow, which includes the approval and payment part. The exact land payment and approval payment trend, I can give you offline.

[Kunal Lakhan, analyst]

Sure, sure. Okay.

[Pirojsha Godrej, executive]

For this quarter major payments focus 3 land acquisitions, 2 auctions, we won in Gurgaon, and our land parcel in Bangalore.

[Kunal Lakhan, analyst]

Yes, fair enough. And my second question was a follow-up on the earlier question on debt levels rising. I mean, we have seen in the past few years like whenever we have reached, especially with the last two fund raises that we have seen, like when we have reached closer to 0.8, 0.9x debt to equity, we have raised equity. Would that be something that you would pursue this time around as well?

[Pirojsha Godrej, executive]

So it's not currently seasonal again I think the significant difference is also in the project scale up that's happened besides the launch scale up. So I think the operating cash flow, we hope to show very, very strong growth over the next year.

Look, if markets rise [indiscernible] but as of now, the thinking is that we can deliver already through the portfolio we've acquired, strong growth for the next couple of years. And then operating cash flow, they're generating will allow us to sustain that growth on an ongoing basis.

I think the cash flow momentum you should see, I think, would be quite positive. And again, the way the sector works is once the business development comes, then the bookings, then the cash flows,then the profits. I think we've clearly done already the business development. I think the bookings is now hopefully very visible as in cash flow. It also started to become quite visible, we're enjoying cash flow each year by 40% plus for the last 2, 3 years. We expect another good growth year this year and an extremely strong growth year next financial year. So I think probably seeking that positive is still very much on track.

[Kunal Lakhan, analyst]

All right. Yes. And my last question is to Rajendra. Rajendra, when we look at -- what will be your unrecognized revenue on our books?

[Rajendra Khetawat, executive]

Hardly -- because nowadays, we recognize on OT, so most of the revenue gets recognized. Only 10%, 15% of the work completion, it is going towards the position, what is left out is to be recognized. Otherwise, most of the projects where OTs are received are recognized.

[Kunal Lakhan, analyst]

So what I'm trying to reconcile is essentially, we have done like almost INR 40,000 crores of sales in the last four years. And we have recognized about INR 6,500 crores of revenues in the last four years again. I understand a lot of our revenue, sales also happened in LLPs, but still trying to understand or rather reconcile like what could be the unrecognized revenue, which should be a substantial number, but I'm just trying to reconcile that with the balance sheet where I see our current -- noncurrent financial liabilities which will be essentially customer agnostic.

[Rajendra Khetawat, executive]

Why don't we take it offline and we can do a reconciliation because it will require going project by project year-by-year. And like you has rightly said, there are projects we got both into JV as well as outright, so we have to see a bit what recognized into last -- this year or last couple of years. And accordingly, we will have to work out the revenue recognition.

[Kunal Lakhan, analyst]

Sure. I'll take it offline .

[Rajendra Khetawat, executive]

And on the land comment, just to answer for this INR 8,000 crores, we have paid around INR 1,900 crores towards the acquisition of that INR 8,000 crores of GDV.

[Operator]

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

[Abhinav Sinha, analyst]

Congratulations to the team for the strong performance that we have seen on sales. So my question first is on the launches that we have planned for fourth quarter. What are the key projects? And how good is the visibility there?

[Unknown Executive]

So Abhinav, subject to, of course, us getting all the approvals. We have a visibility of probable launches and one in Gurgaon, within Sector 89. Then there is one project, which is Sector 146 if you remember the Tropical Isle that we sold, there's a plot next to that, we have one more land parcel there. There is [ a sub-up ] Mumbai, we are again in the process of getting all the approvals. This will be a very interesting launch for the Mumbai portfolio in Kandivali. And then something in Bangalore we're looking at in Old Madras Road.

So these are like high impact and launches that still create a bigger impact. Of course, we have back-up plans and additive plants in case any approval falls shorter, but we're gunning for at least these big ones. Then we have plotted opportunities there as well. I'm just talking about the bigger ones.

[Abhinav Sinha, analyst]

Okay. And similarly on deliveries also, if you can help us with what we're expecting in 6.5 million or 6-odd million we are planning?

[Unknown Executive]

So we have a series of OC planned in cities like -- I mean, we can give you the top end, but largely, we have a couple of OC's planned in Gurgaon, Mumbai. Project deals, we will share with you off-line. But yes, we have a decent pipeline to get us at 12.5 million square feet of committed -- or guided OC calendar. I mean that was evident that, I think [indiscernible] I mean this is already part of the earnings, but projects like Mamurdi, Mahalunge in Pune, projects like Meridien parts of Godrej Air. Aspirationally, also Kurukshetra projects were given.

Series of projects which we are running for. Of course, some of they come, some may flip to next quarter, but 12.5 million square feet of guidance that we get we're reasonably confident to deliver and exceed that.

[Abhinav Sinha, analyst]

Okay. And you were talking about earlier that the sales value today is much higher, 20%, 30% in what we had underwritten. So with that, what are the margins we are looking at now in some of these projects, for example, the Kandivali one or the Gurgaon Aristocrat, et cetera, that we have launched this year.

[Unknown Executive]

Yes. Not being specific project, but fair to say that the PAT margin is a major expansion across most of our projects, which are -- which has -- we've launched in places like Gurgaon and Noida. The vessels above [indiscernible] are yet to hit. But historically let's say if our PAT margin was to say about 10%, you have day to say like-to-like, it will be 15%, 16%, 18% kind of PAT margin.

But of course, it will depend upon how the cost inflation is managed. So with some contingencies, it is a range at which our PAT margin. Of course, there will be some projects will be even higher than that, and there will be some projects within the range that I've mentioned.

[Abhinav Sinha, analyst]

Okay. And one quick question on NCR. So in Noida, we have seen some resolution right of the stuck projects, which was being done by a committee there. So -- and some of your projects have not seen a new launch for a long time. So I mean, do we see those moving now? Or that's another issue?

[Unknown Executive]

I think there is some regulatory led resolution, which is impacting the entire market. It seems to be that it's in the final legs of conclusion, and that will open up a supply for us and some good quality developers, which is pending. But that being said, we do have some amount of previously not being able to do a big bang new project launch, but customer figures any which ways are rating in some of those projects. But yes, there is a big opportunity when the government is able to conclude those -- give those kind of approvals to all developers. I think we will also have that upside.

[Abhinav Sinha, analyst]

All the best to the team.

[Operator]

Our next question is from the line of Parvez Qazi from Nuvama Group.

[Parvez Qazi, analyst]

Congratulations for a great set of numbers. So I just have one question. For all the land deals that we have entered, what is the pending land CapEx which we need to incur over the next couple of years?

[Pirojsha Godrej, executive]

So the pending land payments, including the installment payment would be around INR 1,100 crores to INR 1,200 crores, plus there would be some FSI, TDR payment. So in all around INR 1,300 crores to INR 1,400 crores is what we are looking at in quarter 4. This includes payment towards pending installment of Ashok Vihar also, which is around INR 600 crores.

[Parvez Qazi, analyst]

All the best.

[Operator]

Our next question is from the line of Parikshit Kandpal from HDFC Securities.

[Parikshit Kandpal, analyst]

Congratulations on a decent quarter. So my first question is on the business development. So if you can give us some color on the premium real estate side, especially in South Bombay. So what kind of land opportunities are available for us and if we are evaluating those either through joint developments like in the past, we have done with one partner, but what kind of opportunity do you think can play out over the next 12 months for us?

[Pirojsha Godrej, executive]

Yes. Thanks for that. I think there is good options available in South Mumbai. I think we're looking at a combination of joint ventures with other developers or landowners who have land. Quite a lot of activity happening on the redevelopment side -- priority redevelopments. We feel that Godrej brand gives us a lot of an advantage there in terms of the existing residents being comfortable moving out and coming back in. So that's going to be a big area of focus for us.

There are also some outright purchase opportunities that we might look at. So I think really the full spectrum of opportunities is available in South Mumbai. We hope to have some good project addition there over this next few quarters, where we already have seen good response to our first launch in South Mumbai after a while. Our project is Mahalaxmi [ metro ] project. It took over -- that's gone significantly -- that project is going very well, we sold about INR 700 crores worth of inventory in that since it was launched four months ago. We hope to launch our project in Carmichael Road later this quarter. So hopefully, we can see a good scale up in the South Mumbai market along the side, our overall plan to be the [ logistics ].

[Parikshit Kandpal, analyst]

Just kind of some of the key projects which have been like, lagging behind in terms of launches. So one was a Ashok Vihar which you said you'll launched in the first half of next year. What about the Worli project? And if you can give us any update on your Bandra project with your partner Omkar. So any movement there, if you can help us with some color on this.

[Pirojsha Godrej, executive]

Yes, actually, it's been very positive movement on some of these Mumbai projects. I think our learnings from this is perhaps that we were little over optimistic on time lines on some of the slum redevelopment type of projects, that's both Worli and Bandra project are. A lot of tenants movement has happened actually in the last quarter in Worli. So we're increasingly confident that, that project being ready to launch in the upcoming financial year.

I think Bandra also, there's been quite a lot of movement on the size in terms of understanding the current situation with the partner. We're quite confident that we'll see a lot of momentum in that project during the coming financial year, but it's probably not a project that will actually get launched in FY '25. But feeling much better that that project will eventually be launched than we were perhaps 6 months ago. So I think there's positive movement there.

It is frustrating to see some of these bigger projects have been delayed, including Ashok Vihar. We're obviously doing our best to ensure that those are [indiscernible]. I'm quite happy with the work the team have done to ensure that despite some of these plans getting effected, it hasn't impacted the overall growth of the company, both last year and this year, gunning for 50% kind of growth in presales. And I'm quite happy to see that, that might be achieved even without these key projects. Overall, something like Ashok Vihar we're very [indiscernible], if we are able to launch it next -- over the next few months as we hope. The delay will actually have benefited given the kind of momentum we've seen in NCR on volumes and pricing.

And I think what's great to see is some of these projects we perhaps didn't think of as very critical projects in the overall scheme of things, is something like a project in Noida or this recent launch in Gurgaon are actually becoming a very meaningful project for us. If you look at the total scale of the Noida project, which we acquired in auction for about INR 300 crores we've already sold more than INR 2,000 crores of inventory in this first phase of that project. There's an equal size, second phase that we launched this quarter. So we hope to, over the project like time gets to INR 4,000 crores plus of booking value with that project, which is you can imagine with the INR 300 crores land cost to create very healthy margins for the company once that project is delivered.

Similarly, if you look at this Gurgaon project, we've already sold INR 2600 crores with pricing premium, that was initially about the expectation we have for the overall booking value project. We still have more than 20% of the inventory in that project.

So I think all of these projects are going to become quite useful from a bottom line perspective, but we certainly look forward to launching some of the bigger ones like Ashok Vihar in particular, but also Worli and Bandra. Incidentally, our complete project is -- we are going to launch this quarter, and that project has exceeded by [indiscernible] expected booking value significantly larger actually than Worli or Bandra. So we're looking forward to taking back on this quarter.

[Parikshit Kandpal, analyst]

Sorry, for which project you said? [indiscernible] I missed it. The last project, please.

[Pirojsha Godrej, executive]

We finished the project in Kandivali [indiscernible]

[Parikshit Kandpal, analyst]

Yes, yes, yes. Okay, Kandivali. Got it. Just last one on the Vikhroli. So you mentioned on the on-track launch of 0.6. But I think Gaurav did not mention that in the high probable launches for this quarter.

[Pirojsha Godrej, executive]

So we are ready to launch that. I think frankly, from a total scale of launch it's perhaps not quite as big as the Kandivali one or some of these other ones in terms of what we expect to prelaunch during the quarter, but we certainly do hope to launch that and looking forward to specific projects and [indiscernible]

[Parikshit Kandpal, analyst]

Pirojsha, wish you all the best.

[Pirojsha Godrej, executive]

[indiscernible]

[Operator]

Our next question is from the line of Eshit Sheth from Annual Wealth Management.

[Unknown Analyst]

Congrats to the entire team for very good results. So for Pirojsha, a couple of questions here that I have. If we look at the strategy that you led the team on like to actually lever up the balance sheet just at the start of an up cycle in the real estate market, I think that is showing significant fruits for our company.

Now what I wanted to understand was that if we look at the last two years, you've always been consistent in saying that our objective is to grow 20% over the medium term when we look at Godrej Properties. Now this -- I mean, if you look at the first nine months performance, there has been a stark difference between the volume -- sales volume growth and the sales realization growth, and a large part of it is because of the way prices have moved up in a lot of geographies, including the NCR.

So when we talk about this 20% because pricing is something which is not in our hands. So when you talk about 20%, is it a large part to do with volume growth that we're looking at when we talk about this 20% growth over the medium term?

[Pirojsha Godrej, executive]

A couple of things to point out. One is, I think our volume growth year-to-date is about 20%. Our volume growth last year was 40%. And another thing I'd just point out is as the pricing growth, you referenced is not actually just market pricing growth. It is a complete repermitting of our types of project to more premium projects. So if you look at it, yes, there has also been market price-led but a lot of the pricing [indiscernible] actually more premium set of projects coming into our launch pipeline.

So our project in Gurgaon, for example, we sold at almost INR 20,000 a square foot. Now of course, that is much higher than we are underwriting the project that, but this will also -- even the underwriting was much higher than any previous project in Gurgaon and this is the first project in Golf Course Road. There are similar examples across various cities.

So practically, we will be focused on volume growth being strong. But I think there is also a pricing growth opportunity, not just provided by the market. But by us becoming focused on more premium areas. I think, in general, this year is probably a good base for that. We don't want to become an exclusively luxury developer by any means. So we want to have a right mix of premium projects and mid-income projects, and that will continue.

But I think if you look at this year kind of project mix, we think is where we would like to play on an ongoing basis. And therefore, going forward, most of the growth in top line should happen from a combination of volume growth and market pricing growth. But I think if you look at [ GPR ] growth in the last three years, it's both some of market pricing growth, but largely volume growth and more premium projects driving that growth so far.

[Unknown Analyst]

Sure. Sir, and the second question is that it just so happened in the last 2 years at the start of the year, we've budgeted or we've guided for some amount of sales as well as deliveries. And it just happens that we've exceeded every year substantially. Now is the team prepared for this kind of execution? Because if you look at the past, we've not executed at this scale. So are we very well prepared in terms of the execution part of it?

[Pirojsha Godrej, executive]

I think it's a great question. And then firstly, I think something the team obviously is responsible this time on. It is going to be a challenge to scale up execution, but one that we've certainly done everything we can to prepare for, whether you look at the structure of the company in terms of how we set up individual projects and our global team. If you look at the kind of relationships we're trying to be with the contractors and have [indiscernible] it's a good work. The team has been doing -- should be -- should allow us to do this really effectively.

And I think it's also true that Godrej Properties every few years have scaled up, very different feel from kind of what it looked like 3 or 4 years before that. So I think now with even more rapid scale up, we will be very focused on ensuring our operational capabilities matching that. And as you said also, I think one advantage of focusing a lot on outright old projects as well as more premium projects is that the scale of operational intensity has not increased quite as much as the overall sales value has. Gaurav, do you want to add anything?

[Gaurav Pandey, executive]

That would take more than what Pirojsha just mentioned. And I think the essence if you study why Godrej Properties is probably quite best to perform in the subcycle is we're the only company which has something like a branch-led operating model, which is like every site is a [ P&L ] for us. So we have a very decentralized ecosystems. And of course, governance and controls coming from [indiscernible] center, but every site is an operating unit to us with a operating team with very well defined target being measured weekly and monthly on set-up KPIs.

So yes, the execution 4853 muscle, the governance muscle always have existed for us, but just having the right operating model is allowing us to capitalize on the opportunity of scale up. And while this looks to be a very strong growth and very delighted to see that. But if you just see from our NCR, four business units. Each business unit is run by a sort of a CEO with a executive leadership team. So the problem of execution excellence comes when the speed of [indiscernible] frankly is much more higher, like some of us here to operate in 1 or 2 geographies.

So I think the potential for us to do better and ensure that each KPI is delivered upon is very new handling for us right now. But of course, this is something which we don't take for granted, and we keep pretty strong in that and performing strong monitoring mechanisms for insurers. Yes.

[Unknown Analyst]

Got it. Sir, and just one last question I had. At the end of this quarter, we saw the resignation from your uncle Mr. Jamshyd Godrej. Is there any kind of precursor to some kind of settlement for the Vikhroli land that we can look at for Godrej Properties in specific?

[Pirojsha Godrej, executive]

No, I think we announced the rationale for the resignation along with announcement, which is that we have a bond of our directors stepping off the Board, when they turn. My uncle, Jamshyd Naoroji Godrej turned 75 about a week or 2 ago. And therefore, at that time, he stepped off the Board. We're very grateful to all his contributions to the company over that time. He's I think the current director in the past 12 months who would have turned 75 and stepped off the Board. So that's the [indiscernible].

[Operator]

Our next question is from the line of Jahnvee Shah from LIC Mutual Fund.

[Pirojsha Godrej, executive]

Yes, go ahead please.

[Unknown Analyst]

My question was, can you give us some update about the Godrej permit property in Gurgaon? On -- how -- like what are the repair works going on? And what is the number of the customers that took up the offer of buyback?

[Pirojsha Godrej, executive]

Yes. The repair works there have gone in full swing. We hope to complete them by the end of this calendar year. As of now, we've had about 10% of the customers opt for the buyback option, so we bought back little over 100 [indiscernible] so far. We expect to see that growth of about 200 over the next few months basis current visibility.

[Unknown Analyst]

And out of the INR 155 crores that are like -- that are provided for the rate and how much did it cost?

[Rajendra Khetawat, executive]

We have spent around INR 20 crores, INR 25 crores till date.

[Operator]

The next question is from the line of Ritwik Sheth from [indiscernible].

[Unknown Analyst]

Congratulations on a great set of numbers, sir. Sir, I have just one bookkeeping question. The cash flow statement that we put out in the presentation, is the net operating cash flow to our share or this is before any share to JV GDA?

[Pirojsha Godrej, executive]

Yes, our share.

[Ritwik Sheth, analyst]

It is our share. Okay. All the best.

[Operator]

Our next question is from the line of Manoj from Geometric.

[Manoj Dua, analyst]

Am I audible?

[Pirojsha Godrej, executive]

Yes. Go ahead.

[Manoj Dua, analyst]

Okay. Congratulations Pirojsha for a great set of retail number and the kind of profitability it gives, like you said, 18-plus percent, something plus. My -- one is a bookkeeping question. What would be our corporate fixed costs for FY '23 and what would be for FY '24? Any range ballparking number?

[Rajendra Khetawat, executive]

So prospect fixed cost is generally after allocation would be in the range of 3% to 4%. But on an overall basis, it will be at a pan-India, basically it will be like a 6% to 7%.

[Manoj Dua, analyst]

Okay, 6% to 7%. Okay. And my second question is like people are asking about debt equity gearing. So the kind of cash flows the company has because of these presales and the kind of profitability and all of this thing. And even if it's been a different accounting matter, the equity would have changed. How do you think about your BD development with these kind of misrepresented debt equity, any ballpark, absolute number of debt you have in your mind? How do you think about or how do you want to communicate to the shareholders?

[Pirojsha Godrej, executive]

Yes. I think we mentioned the gearing ratio that of any where around [ 0.5 to 1:1 ] is probably our comfort level. 1:1 would be a little under INR 10,000 crores at the moment. So that's roughly the number we look at. So we've also said that temporarily, if we need to be lower for that as long as we're confident of bringing it back into that phase, we would be comfortable to do for the short term.

[Manoj Dua, analyst]

And my last question is, can you tell something more about our project Ashok Vihar? What would be the size and what would the kind of offering it would have, if it is possible?

[Pirojsha Godrej, executive]

No, I think, of course, we'll have all the information on it once the project is ready to launch, but it's going to be a large project for us, nearly 4 million square feet of area. I think pricing in NCR has done very well over the last few years. So we're very confident of that project achieving a good liquid price. I think location of the land, the surrounding area, the quality of the plan we have, we hope to make that a blockbuster launch as soon as our approvals are complete.

[Operator]

Thank you. Ladies and gentlemen, that was the last question for today. 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 give 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, and you may now disconnect your lines.