Godrej Properties - Q4FY13 Result Update - Nirmal Bang

- Godrej Properties' (GPL) 4QFY13 profits were 29% and 13% higher than our and consensus expectation respectively on account of higher operating margins led by development management fee income.

- GPL reported revenue of Rs3.2bn (up 17% YoY, down 11% QoQ) in line with our expectation but 10% below consensus expectation.

- The company reported strong OPM of 31.6% much above our (26.2%) and consensus expectation (27.2%). We believe strong margins is likely driven by higher fee income of ~Rs300mn booked in 4QFY13 as against 200mn in 3QFY13.

- This resulted in EBIDTA of Rs984mn (up 25% YoY and 31% QoQ).

- The higher minority interest of Rs 180mn indicates that revenue is largely booked from its high margin Godrej One property sold to its group company. Consequently we believe sustainability of such high margins will be challenging in FY14E.

- Gearing level increase to 1.1x in 4QFY13 from 1x in 3QFY13.

- Consequently GPL reported PAT of Rs 532mn (up 34% YoY and 50% QoQ) against our expectation of Rs43mn and consensus expectation of Rs471mn

Source : Equity Bulls

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