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Godrej Construction focusing more on infrastructure as realty slowdown bites

The company has already bagged an order from Metro 3 corridor and three packages from the Metro 4 corridor to supply ready-mix-concrete/such products

Liquidity crisis, Godrej Construction, Urban infrastructure, Construction materials business, Godrej & Boyce Mfg Co, Metro 3 corridor, Metro 4 corridor, Ready-mix-concrete, AAC blocks, Concrete blocks, Pavers, Mumbai, Bengaluru, Pune

The lingering liquidity crisis and demand slowdown in its bread-and-butter real estate business since the past three-four years have resulted in the construction materials business unit of Godrej Construction shifting focus to urban infrastructure, a senior company official said. The construction materials business arm is a strategic business unit of the diversified Godrej & Boyce Mfg Co and is also eyeing a 20% jump in revenue this fiscal to Rs 300 crore from Rs 250 crore last fiscal.

One of the important things it has spotted while the realty sector has been under stress is that the government is focusing a lot more on urban infrastructure now. With increasing budgetary spends, it sees good demand for construction materials business going ahead.

The company has already bagged an order from Metro 3 corridor and three packages from the Metro 4 corridor to supply ready-mix-concrete/such products. Godrej Construction offers a wide range of construction materials which include specially engineered ready-mix concrete products, AAC blocks, recycled concrete blocks and pavers for different types of applications. It also has reduced its supply to real estate developers due to uncertainty on payments, as most players are grappling with liquidity crisis.

Earlier it supplied RMC and recycled concrete products only to the real estate sector. But with the sector going through a difficult phase for the past many years, it changed its strategy to focus on urban infrastructure. It prefers to be asset-light. Its model is to have strategic partnerships with vendors to scale up as and when needed.

The company wants to concentrate on a few markets like Mumbai, Bengaluru and Pune where it has its manufacturing facilities.

Godrej Construction is also into developing modern living spaces and leasing commercial realty space.

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