Research #18- Ganesh Housing Corporation Ltd.
Welcome to the 18th edition of our small-cap coverage. Today, we're diving into a Real Estate construction-focused business, ‘Ganesh Housing Corporation Ltd.’
Let's start! But before we do, here is the link to the 17th edition
LETS GO!
1. Company Share Price chart & comparison with Index:
*Comparison charts are Indexed*
Ganesh Housing Corporation Ltd. Performance
Ganesh Housing Corporation Ltd. Vs Nifty50
Ganesh Housing Corporation Ltd. Vs Nifty SmallCap 50
2. About Company:
Ganesh Housing Corporation Ltd is an Ahmedabad-based real estate development company primarily focused on residential and commercial projects. The company has a strong land bank and specializes in mid-to-premium segment housing, townships, and commercial properties. It has also ventured into plotted development and industrial parks.
Key Points:
Business Overview: Ahmedabad-based real estate developer, ISO-certified, with 22+ mn sqft sold and 35 mn sqft under development. Expanding into SEZs and townships.
Projects:
Residential: 17 projects, including Malabar Exotica, Malabar County, Maple County, Shangrila, and more.
Commercial: 4 office spaces, including Maple Trade Centre and Magnet Corporate Park.
Ongoing: Malabar Exotica and Malabar County III completed ahead of schedule.
Planned: 4 projects (Sep’24 – Sep’34) – Million Minds (Residential & Commercial), One Thaltej, and a township.
Expansion: Developing a 450-acre township (15.3 mn sqft) in Ahmedabad, launching in Q4FY24.
Acquisition: Gatil Properties now a 100% subsidiary after Q4FY23 stake purchase.
Revenue (FY23): 98% from land & construction, 2% from other income.
Focus: Developing a 6 mn sqft SEZ.
(Source - Screener)
Company Journey
Projects Updates
3. Management Overview:
KMP's Remuneration:
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4. Revenue Breakdown:
5. Company’s Financial Analysis:
The Financials can look unstable due to the nature of the business. As it is a work of Huge capex and the construction takes a few years. The realisation is unequally distributed as and when the inventory is sold.
SALES:
The Sales have grown at a CAGR of ~12% in the past 8 years.
EBITDA:
EBITDA has increased at a CAGR of ~17% for the past 8 years. The margins were negative in FY20 and FY21 due to pent-up inventory because of COVID-19.
Net Profit Margin%
Net profits have continuously increased at a CAGR of ~30% for the past 8 years.
BALANCE SHEET:
Borrowings have decreased.
Cash and Receivables have come down which is a good sign.
Inventory levels are stable.
Common-Size Balance Sheet
Cashflow Statement:
KEY RATIOS:
Cash Conversion Cycle:
As it is a cyclical Real-Estate construction business, it does not have a proper Cash Conversion Cycle.
6. Shareholding Pattern:
Promoters have increased their holdings.
FIIs have decreased their holdings.
DIIs have decreased their holdings.
The public has decreased their holdings.
7. Concall Analysis Q2FY25:
Operational Highlights
Malabar Retreat (Premium Residential Project):
Construction progressed to 22% completion.
Pre-sales exceeded ₹110 crore.
The sample apartment is nearly ready, expected to increase traction further.
Million Minds SEZ (IT Commercial Project, Phase I):
One year ahead of schedule; completion expected by Q4 FY25.
Possession for fit-outs to start from April-May 2025.
Strong leasing demand from major IT players.
One Thaltej (Commercial Project):
1.8 million sq. ft. of commercial space with expected revenue of ₹2,100 crore.
Approvals in progress, completion expected by H2 FY28.
Godhavi Township:
Work on sports complex to begin soon.
Expected launch: Q2 FY26.
The entire project has a sales potential of ₹5,000 crore over 7-10 years.
Financial Performance (Q3 FY25 vs Q3 FY24)
Revenue: ₹264 crore (44% YoY growth).
EBITDA: ₹218 crore (57% YoY growth), EBITDA margin: 83%.
PAT: ₹160 crore (60% YoY growth), PAT margin: 61%.
9M FY25 Performance:
Revenue: ₹734 crore (19% YoY growth).
EBITDA: ₹589 crore (23% YoY growth).
PAT: ₹433 crore (25% YoY growth), already matching FY24 full-year PAT.
Key Business Strengths
High EBITDA & PAT margins due to historically low-cost land holdings.
535 acres of fully paid land bank.
90-95% of Q3 revenue came from land sales, though project sales and annuity income from leasing will play a larger role in coming years.
Q&A Highlights
Land sales vs. unit sales: Recent revenue mainly from land sales, but project sales and leasing income will increase from FY26.
Ahmedabad market trends: Mid-to-premium residential units (3BHK & above) remain in high demand.
Jantri rate (circle rate) revision impact: Developers are in a "wait-and-watch" mode before launching new projects.
Cash deployment: The company is focused on Ahmedabad expansion, with no immediate plans to enter other cities.
Million Minds SEZ vs. GIFT City: Million Minds focuses on IT services, while GIFT City is more for financial services.
Dividend payout: The company paid 20-30% of profits as dividends in FY24; the board will decide the FY25 payout in May.
8. SWOT ANALYSIS
9. Growth and Opportunity
Ganesh Housing Corporation Ltd (GHCL) is strategically situated for continuous growth, supported by its land assets, increasing commercial presence, and alignment with beneficial government policies. Its strong financial management and market positioning enhance its capacity to leverage emerging opportunities, guaranteeing sustained value creation.
10. Management Guidance
The management insights for Ganesh Housing Corporation Ltd highlight its high growth path, effective project implementation, and prudent financial oversight. With a defined plan for growth, prompt project completions, and no debt, the company is poised to take advantage of market opportunities and enhance long-term value generation.
11. Competitors in the Market:
Ganesh Housing Corporation Limited operates in the real estate development sector, primarily in Gujarat, with a focus on residential and commercial projects. Its competitors include:
Direct Competitors (Real Estate Developers in Gujarat)
1. Sobha Limited – Engaged in residential and commercial real estate development.
2. Godrej Properties – Expanding in Ahmedabad and other Tier-2 cities.
3. Brigade Enterprises – Has projects in multiple cities, including Gujarat.
4. Arvind SmartSpaces – Focuses on real estate development in Ahmedabad and other Gujarat cities.
5. Sun Builders – A strong local player in Ahmedabad’s real estate market.
6. Savvy Infrastructure – Another well-known Gujarat-based real estate developer.
Indirect Competitors (Pan-India & Regional Developers Expanding in Gujarat)
7. DLF Limited – One of India’s largest real estate developers, expanding in multiple regions.
8. Oberoi Realty – Primarily Mumbai-based but expanding into other metros.
9. Phoenix Mills – A major player in commercial real estate and malls.
10. Adani Realty – Part of the Adani Group, developing high-end projects across India, including Gujarat.
12. Economy Overview:
Indian Economy:
GDP:
Global GDP is projected to grow at 3.2% in 2024 and 3.3% in 2025. The trades have become firm supported by the strong exports from Asia, especially the technology sector. The businesses are majorly on ‘cost-cutting’ projects as the discretionary spendings are still low. Governments are facing fiscal challenges due to higher interest rates, spending on citizen schemes and climate change.
(Source: IMF, World Bank)
Source- IMF & World Bank
Inflation:
The economy has stayed remarkably resilient and thus, the inflation is coming back to the target level. Even during the high inflationary environment, consumption was still on rise especially in the emerging economies. The economy, despite facing deflation and recession warnings, has been growing steadily. Forecasts suggest for inflation to come down from 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025 globally.
(Source: IMF, World Bank)
13. Industry Overview:
Market Size:
The Real Estate Industry In India Market size is estimated at USD 563.66 billion in 2025 and is expected to reach USD 855.79 billion by 2030, at a CAGR of 8.71% during the forecast period (2025-2030).
(Source - Mordor intelligence)
India's Real Estate Market 2024 Highlights:
Residential Growth: Sales surged 17% YoY in the first three quarters, driven by buyer confidence and rising demand for premium housing in cities like Mumbai, Bengaluru, and Pune. Property prices increased: Bengaluru (+9%), Mumbai/NCR/Pune (+4-5%).
Commercial Sector: Strong demand for office spaces, especially in IT hubs like Bengaluru and Hyderabad, with rising interest in co-working spaces and Grade A developments.
Urbanization Forecast: By 2047, 50% of India's population will live in urban areas, driving demand for residential, office, and retail spaces. Emerging segments like senior living, co-living, and data centers will see exponential growth (data center demand: +15-18 million sq. ft. by 2025).
Retail Real Estate: Organized retail growing rapidly with a focus on experiential, digital, and sustainable spaces. Retailers are adopting e-commerce, omnichannel strategies, and energy-efficient designs.
PMAY Urban 2.0: The government launched a ₹10 lakh crore initiative to provide affordable housing to 1 crore urban poor and middle-class families, boosting demand for affordable and mid-segment housing.
Tier II and III Cities: Urbanization and infrastructure growth are shifting real estate development to smaller cities and city peripheries, creating new growth centres.
(Source - Mordor intelligence)
Indian Real Estate Market Trends:
In 2024, India's housing market is experiencing robust growth, led by the premium and luxury segments. Cities like Mumbai, Pune, Bengaluru, and Hyderabad are seeing a significant rise in high-end housing launches and sales, driven by urbanization, higher incomes, and evolving buyer preferences.
Home sales in FY23 saw a 48% jump in value and a 36% increase in volume year-on-year, reflecting strong consumer sentiment and favourable market conditions. Post-pandemic shifts have heightened demand for spacious, future-ready homes with premium amenities.
Integrated communities and luxury projects with smart infrastructure and green spaces are in high demand, especially in cities like Mumbai, Delhi NCR, and Bengaluru. Buyers prioritize modern living and sustainable solutions in their property choices.
HNIs and NRIs are driving the luxury real estate boom, viewing these properties as status symbols and investments. Pandemic-era savings and regulations like RERA have further boosted confidence among developers and investors, cementing the sector's growth trajectory.
(Source - Mordor intelligence)
Challenges in India's Real Estate Market:
Economic Volatility: Market fluctuations and economic instability reduce property demand and increase competition. Solution: Diversify portfolios and focus on high-demand assets like rentals.
Regulatory Hurdles: Complex legal frameworks, zoning laws, and environmental regulations create obstacles. Solution: Engage legal experts, ensure due diligence, and maintain transparency.
Rising Interest Rates: Higher rates make loans costly, affecting buyers and developers. Solution: Use creative financial instruments to maintain affordability.
Political Instability: Policy changes and uncertainty impact market stability. Solution: Build resilient models and adapt to political shifts.
Affordability Issues: High urban property prices outpace income growth. Solution: Promote affordable housing, alternative financing, and innovative urban planning.
Urbanization Strain: Rapid urbanization outpaces infrastructure, leading to congestion. Solution: Collaborate with authorities to develop sustainable and well-connected spaces.
(Source - Sell.do)
Investment Opportunities and Market Outlook:
Residential Sector:
High demand for affordable and middle-income housing in urban areas.
Luxury home sales surged by 75% in 2023, with a 151% YoY growth in early 2023.
Housing sales in the top 7 cities reached 1.14 lakh units in Q1 2023.
Housing prices in top 8 cities rose by 7% YoY.
Under PMAY-U, 119.7 lakh houses sanctioned; 74.75 lakh completed by June 2023.
Commercial Sector:
Strong demand for office spaces driven by IT/BPM and global capability centers.
Office leasing reached 14.8 million sq. ft. in Q2 2023, highest since Q1 2021.
Institutional investment in office spaces grew 2.5x in early 2023 to US $2.7 million.
Delhi-NCR and Bengaluru lead in private equity investments.
Warehousing and Logistics:
Growth fueled by organized retail and supply chain resilience post-COVID.
Private equity investments rose to US $4.2 billion in 2023 (from US $3.4 billion in 2022).
The construction industry attracted US $60.53 billion in FDI (April 2000–March 2024).
Market Growth:
The real estate market is projected to reach US $1.04 trillion by 2029, growing at a CAGR of 25.6%.
Key cities with high investment potential: Bengaluru, Delhi-NCR, Hyderabad, and Coimbatore.
(Source - Sell.do)
Thank you for reading till the end! We hope you enjoyed this report.
Researched By- Naresh, Mayank and Vaibhav
All information is sourced from the company's annual reports, GoIndiastocks.in, Screener. in, industry reports and Economy Outlook reports.
Disclaimer- We do not recommend buying or selling any stock. You should consult your financial advisor before buying or selling any financial instrument.
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