Real Estate India

There is a perception that the Godrej Group has not been as successful in grabbing new growth opportunities as other old business houses.

This perception is probably because we don’t have- large listed companies like other old business houses. For a long time, most of Godrej group companies were privately-held and they began to get listed only in the last decade or so. This is why our growth in emerging sectors such as real estate, agri-commodity, processed food, retail and consumer goods has remained hidden from public view. Like others, we have benefited from the economic boom and most of our companies have been out-performers in their respective segments. However, I must add that the Godrej group has never ventured into capital-intensive and high-volume commodity businesses like steel, metals and cement, as other contemporary business houses. Our forte lies in marketing and brand building and we have been very successful in that. These businesses take time to mature and tend to be smaller (in terms of net sales) than their commodity cousins. Godrej is one of India’s leading brands in personal care, white goods and furniture and our brand penetration is second only to Hindustan Unilever and continues to grow. Going forward, what’s your vision for the group? We will maintain our focus on brand-building across all our businesses. However, there could be a re-alignment in contribution from various business segments. Right now, bulk of the group’s revenues comes from consumer durables and FMCG businesses. Going forward, I expect real estate to emerge as the group’s growth driver followed by retail and food. Godrej Properties, which is 75%-owned by Godrej Industries, is likely to emerge as the group’s biggest company in the next five years. In FY07, Godrej Properties’ net profit was Rs 42 crore while revenue touched Rs 125 crore. We expect it to double its profits and revenue for at least the next two years. Godrej Property is expected to raise Rs 400-500 crore through an initial public offer some time by FY08 to fund its expansion plans. We see real estate more as a brand and design-oriented business. We are targeting premium customers across India’s top 10 cities. The aim is to emerge as one of country’s top three real estate developers but without diluting our brand equity. All our properties are distinctive in design and offer something different than what is generally available in the market. Currently, we are developing 27 million square feet of property across India’s major cities. Our biggest project is the development of 50-storey high residential complex in central Mumbai. Once completed it will be India’s tallest residential building and will become the landmark project for the group.

Source:http://economictimes.indiatimes.com