Godrej Properties has been significantly hit due to the reverse migration of workers that took place during the COVID-19-inducted lockdown. This impacted construction activities across the country, the company stated in its filing to the exchange.
The company stated, “This is expected to cause project execution delays and working capital issues for financially weak developers.” Due to the lockdown and its subsequent toll on economic activity, the company said, the start of FY21 has been muted. However, the company is confident that the customers would eventually return to the market in the second half of the financial year to partially mitigate the demand impact in earlier quarters. “With operations resuming in the construction sites located in the non-containment zones in accordance with the directives issued by the Central, State Government and Local Administration Guidelines, the Company expects to see improved business from the second half of FY 2021.”
Meanwhile, the company revealed that the construction activity has begun on 90 per cent sites with 42 per cent workforce strength of pre-COVID-19 times.
The demand is expected to catch up within the year, but the customers would expect relaxed payment plans. “We also expect some increase in customer outstanding owing to the pessimistic liquidity environment.”
The company in filing hinted that along with the favorable government reforms, and increased transparency, there will be consolidation amongst real estate players.
The Company remains positive about the long-term direction of the sector on back of higher consumer confidence and increasing affordability due to declining interest rates and stagnant real estate prices.