Shares of Godrej Properties fell more than 3% on Aug. 3, the day after the company reported earnings.

On August 2, the Mumbai-based real estate developer reported a 154% year-on-year rise in consolidated profit to Rs 43.3 crore in the quarter ended June, as the second Covid wave was at a lower base than in the year-ago period
Revenue surged 184% to Rs 244.67 crore in the quarter.

Subsequently, those numbers softened due to an 83% drop in profit, driven by revenue and operating performance, with operating income down 82%.

In the June quarter under review, core profit rose 41% year-on-year to Rs 116 crore but fell 71% quarter-on-quarter.
The stock was trading at Rs 1,419.40 on the BSE at 12.52 pm, down Rs 43.75 or 2.99%. It has touched an intraday high of Rs 1,487 and an intraday low of Rs 1,411.95.

The company also announced its CEO succession plan, with Gaurav Pandey taking over as the new MD and CEO from Mohit Malhotra.

“Godrej Properties has announced a change in its leadership team, effective January 1, 2023. Gaurav Pandey, currently CEO of the Northern District, will succeed Mohit Malhotra as the company’s MD and CEO,” the company said in its BSE filing.

CLSA, a global research and brokerage firm, maintained an underperforming rating on the stock and cut its target price to Rs 1,523. It believes that low collections and steady spending are weighing on cash flow. “We maintain our FY23 pre-sales guidance of over Rs 10,000 crore and remain cautious and revise our margin forecast,” it said.

Morgan Stanley has an underweight rating on the stock with a target of Rs 1,487. “New launches and project acquisitions are key themes for the company. These moves will drain capital and increase net gearing,” it said.

BofA Securities has a neutral rating on Godrej Properties with a target of Rs 1,650. “The affordability level of demand remains comforting. Given the internal boost, the impact of the CEO transition is expected to be flat,” the research firm said.