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Revenue hit by soft deliveries; upcoming launches key to driving pre-sales

Achieves 57% of annual BD guidance

* Godrej Properties’ (GPL) pre-sales volume for 1QFY26 declined 31% YoY/18% QoQ to 6.2msf (in line with estimates). However, pre-sales value stood at INR71b (-18% YoY/-30% QoQ, 11% below estimates). Realization grew 19% YoY to INR11,478/sq. ft. The quarter’s pre-sales were driven by new project launches—Godrej MSR City, Godrej Majesty, and Godrej Tiara— which together accounted for a booking value of INR38b (54% of total reported bookings in 1QFY26).

* Notably, 89% of the contribution came from projects in NCR, MMR, and Bengaluru.

* In 1QFY26, GPL launched six new projects/phases across four cities, with a cumulative saleable potential of INR85b, and deliveries stood at 0.8msf.

* GPL’s gross collections surged 20% YoY to INR41b (37% below estimates), whereas OCF (pre-interest and tax) was down 4% YoY to INR9.5b. The company spent INR20.2b on new land investments and approvals. This led to a cash deficit of INR13.7b and increased the net debt to INR46b, or 0.26x of equity (vs. 0.19x as of Mar’25).

* GPL added five new projects in 1QFY26 with a potential saleable area of 9.24msf and an estimated GDV of INR114b, achieving 57% of its annual guided BD in the first quarter itself.

* Overall, 0.06msf was leased in 1QFY26 across three assets.

* P&L performance: GPL reported revenue of INR4.3b, down 41% YoY / 80% QoQ (57% below our estimates), due to the absence of material completions during the quarter.

*GPL reported EBITDA loss of INR2.4b vs a loss of INR1.3b YoY

* GPL's other income increased 23% YoY/2x QoQ, driven by fair value gains from the acquisition of three joint ventures during the quarter (Madhuvan Enterprises, Vagishwari Developers, and Munjal Hospitality), resulting in a PAT of INR6b, up

Key management takeaways

* The company aims to lead in each operating market while sustaining a strong national presence, expecting healthy volume and price growth amid rising housing demand and industry consolidation that favors branded players.

* Launch-ready inventory from land acquired since FY23 stands at INR550- 600b, with total unsold inventory at INR1.14t and pending collections of INR510b; price hikes were modest across regions.

* 1QFY26 launches amounted to INR85b in GDV, with 64% of sales from new launches; FY26 guidance remains unchanged at INR400b in launches and INR325b in pre-sales.

* A strong pipeline includes launches across Gurgaon, Greater Noida, Mumbai, Pune, Bengaluru, Panipat, Kharghar, and Hyderabad, along with one Evergreen Square and a plotted development.

* An outstanding INR9b is yet to be spent on FY26 deals, with an additional INR12b pending for deals signed in earlier years.

* Like-for-like price increases were 2-3% in the North and South markets, 1-2% in Mumbai, and a marginal 0.5% in Pune

Valuation and view

* GPL completed FY25 with a strong performance across key operational parameters of pre-sales and cash flows. With a strong launch pipeline, the company remains on track to achieve its operational goals. Thus, we keep our FY26/FY27 pre-sales estimates unchanged.

* While gross margin has sustained at a healthy 35-40% for recognized projects in P&L, the higher scale of operations has led to a proportionately high overhead increase, leading to subdued operating profits. We expect the sales booked over the past two years, characterized by a better margin profile and outright ownership, to be recognized after FY26/FY27, which will allay investor concerns.

* We believe GPL will continue to surprise on growth, cash flows, and margins, given its strong pipeline and healthy realizations, which have been key concerns for investors. We reiterate our BUY rating with a TP of INR2,843, implying a 39% potential upside.

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