Originally posted by barla   5% of the land development in the next 15 years will make the stock double every two years over the next 12 to 18 years.   Of course if they dont do what the other real estate companies do. Operate wiht black money. I will give the calculaiton over the next few days.   Originally posted by om2112 Originally posted by barla   I will put up a seris of write ups on Godrej Industries about the land value and what would happen in the next 12 to 25 years. Why it should give the returns that I expect it to. I will use links that support what I say. A few of my personal assumptions.   The Land at Vikhroli that belongs to Godrej can be encashed at a potential 16 billion dollars. This means Rupees 640 billion. i.e. 64000 crores.   They refer to 1500 acres when the land is actually in the range of 3500 acres. Remember CRZ has been knocked out. So the entire land can now be developed.     http://en.wikipedia.org/wiki/Godrej_Group   Caution : Ownership of the land can be best decribed as follows.   Winston Churchill remarked of Russia that it was a riddle inside a mystery wrapped in an enigma   Same is the secret of the ownership of the Godrej land at Vikhroli.   Originally posted by basant Barla: Let us not get into vague price projections.                      GIL currently operates on land taken on rent from Godrej & Boyce. Close to 3500 acre land bank is owned by Godrej and Boyce Manufacturing Company Ltd (GBMCL) at Vikhroli, a central suburb of Mumbai. 2000 acres of this massive property is covered with mangroves but the remaining  1500 acres has tremendous development potential and is currently used as factories/under development/commercial premises/vacant. Over the years we can expect GIL to shift it’s manufacturing facilities from Vikhroli to extended suburbs of the city and use the land taken on lease from Godrej & Boyce for further development. This will unlock further value going ahead, but the timing is uncertain.                     GIL develops this land on 40-60 sharing basis with GODREJ PROPERTIES.As GIL has 69 per holding in GOD PRO it effectively gets total 80 per share in this.                     Here as an individual investor our job is to analyse the potential.We done it.Land price estimations and time which it takes to develop land are beyond our expectations.

Barla

So invest in Godrej Industries or Godrej Prop which is a pure real estate play ? Which one is better...

What does one mean by pure real estate.

Originally posted by values Originally posted by barla What does one mean by pure real estate. The core business being real estate...which is what Godrej Prop is into. But Godrej Industries is a FMCG...isnt it ?

                               Two Birds IN One Shot
                     Investing in GIL is like above phrase.As it has 25 per stake in GCPL you can get FMCG  and it has 70 per stake in GOD PRO you can get  realestate.Along with that Oleochemical business,Oil palm business,Chocalate,Meat business r FREEEEEEEEE.

Originally posted by rinkumalpani But at first glance the PE for godrej industries seems very high and eps low.....how do u justify that?

                Dont look it in single parameter.Generally for standalone units pe valuations r applicable.But here you have to apply SOPT method.


Edited by om2112 - 01/Mar/2011 at 1:57pm