‘We have seen strong bookings since March’

Godrej Properties posted a pre-tax loss of ~14.69 crore in the June quarter of FY21 as compared to pre-tax profit of ~140 crore in Q1FY20. Though the company’s collections from customers and cash flows have fallen in Q1FY21,

PIROJSHA GODREJ, chairman of the company, tells Raghavendra Kamath that the business metrics are improving. Edited excerpts

Your collections from customers were about 40 per cent of precovid levels. Is there any improvement in the current quarter?

They are better now. Collections are linked to the achievement of construction milestones, and in Q1, there was barely any construction with a complete lockdown in April and most of May. Our labour strength has now reached 60 per cent of pre-covid levels so we believe both construction and collections will

improve in the coming quarters.

Net debt has also increased by ~590 crore. Can you shed some light on that? Do you see it increasing in the coming quarters?

Debt has gone up for same reasons I mentioned. We have entered new projects, and business development payments and construction payments for

Q4 needed to be made. Our debt levels will continue to go up in the coming quarters as we get a large number of new projects ready for launch. Operating cashflows are weak compared to last year but they will be close to break even going forward. We are confident the investments we are making this year will create strong operating cash flows in the years ahead as our new projects are launched.

Your 10:90 payment plan has helped in sales booking but hit cash flows. Will you continue with that?

Each project will now have its own payment plan linked to the project strategy and funding requirements.

The company has 15 million sq ft of launches planned in FY21. Will you go ahead with that?

As long as regulatory approvals are received in time, we will go ahead with our planned launches. We will, of course, have to be agile and tweak our strategy, if needed, after gauging the market environment.

Are you tweaking your launches, pricing, size of apartments and so on to suit the current environment?

We are constantly re-evaluating project dynamics and customer requirements but as of now there have been no changes to pricing and apartment sizing.

When do you expect a broadbased recovery in residential real estate?

It is difficult to predict but we believe the recovery will likely start from the next calendar year. It depends a lot on external factors such as when the pandemic ends, how the government acts to stimulate the economy and the real estate sector and so on. Demand will eventually return as it always does.

What makes you confident about the recovery?

Going into the crisis, affordability was the best since 2001 with interest rates at extremely low levels. Many people who want the security of home ownership in the face of this pandemic are thinking of buying homes. We have seen strong bookings since March despite the current crisis, so we believe things will continue to pick up in the quarters ahead.

What kind of surge have you seen in distressed opportunities and have you signed any deals in this segment in the last quarter and this quarter?

We are seeing a lot of interesting opportunities to acquire new projects and expect this momentum to continue. We didn’t add any new projects during Q1 but have a strong pipeline that we expect will fructify in the coming quarters.

How are you planning to use the ~1,000 crore you raised through NCDS?

We will use the overall liquidity from our QIP last year and NCD issue this year to ensure we are able to continue to fund business development and will do our best to emerge stronger from this crisis by gaining market share and meeting all our customer commitments.