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Well-positioned for further scale-up

Over the last five years (FY21-26), Godrej Properties (GPL) has scaled up significantly with a 38% CAGR in presales to INR342b, becoming the largest developer by presales. Its strong performance is driven by healthy launches, strong business development, diversification across multiple regions, and deeper penetration in core markets. Consequently, its market share in the top 8 cities has expanded by 170bp to 4.4% during FY21-26. Considering a robust launch pipeline and its ability to simultaneously launch multiple projects across regions, we expect GPL to deliver a presales CAGR of 10% during FY26-28 (on a high base). Consequently, with healthy project execution, we expect a 17% CAGR in collections, which would lead to a healthy NOCF (pre-tax) generation in the next two years. Hence, leverage is expected to remain at a comfortable level at INR73b in FY28 despite new project acquisitions. We reiterate our BUY rating with a TP of INR2,280.

Robust launch pipeline to drive 10% presales CAGR despite high base

The ramp-up in BD activity, with the addition of 210msf+ in the last decade, has led to a strong scale-up in business, as presales has grown 7x to INR342b (27msf) in FY26 from ~INR50b in FY16. Consequently, its market share in the top 8 cities expanded 174bp to 4.4% during FY21-26. Considering industry tailwinds and strong project additions in the past five years, GPL has built a robust launch pipeline for the next two years, which will lead to a further scaleup. We bake in 10% CAGR in presales to ~INR413b over FY26-28E.

Strong cash flows expected in the next two years

GPL has launched 180msf of projects in the last 10 years. The annual collections have grown significantly from INR44b in FY21 to INR200b in FY26, which translates to 35% CAGR during FY21-26. Cumulative OCF (pre-tax) stood at INR258b in FY21-26. On the back of continued project execution, we expect a 17% CAGR in collections to INR274b by FY28E. Consequently, we expect the NOCF (pre-tax) to increase in the next two years. Overall, net debt is expected to remain comfortable at INR73b in FY28.

Valuation and view

On the back of diversification across several regions as well as market penetration, GPL’s market share has increased by 170bp in the last five years and now holds a 4.4% share in the top 8 cities. Despite the high base, management has guided for 14% presales growth in FY27. We expect growth to continue, albeit at a moderate rate of 10% CAGR in the next two years. However, collection growth is estimated to be slightly higher than presales growth at 17% over the same period. The launch pipeline provides comfortable growth visibility over the medium term. Despite an increase in net debt in FY26, leverage is at a comfortable level. We reiterate our BUY rating with an SoTPbased TP of INR2,280.

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