Godrej Properties Limited — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Godrej Properties delivered a strong Q1 FY26, achieving its highest ever quarterly net profit of INR 600 crores and robust booking value of INR 7,082 crores. Despite a YoY decline in bookings and total income, collections and EBITDA saw healthy growth. The company made significant progress in business development, securing 57% of its annual guidance, and is confident in meeting its FY26 targets, though some project approvals remain challenging.

Highlights

  • Highest ever quarterly net profit of INR 600 crores, a growth of 15% year-on-year.

  • Q1 FY26 booking value of INR 7,082 crores, marking the eighth consecutive quarter exceeding INR 5,000 crores.

  • Collections in the 1st Quarter grew by 22% to INR 3,670 crores.

  • EBITDA grew by 18% to INR 915 crores.

  • Business development additions of 5 new projects with an estimated booking value of INR 11,400 crores, achieving 57% of annual guidance in Q1.

Concerns

  • Booking value showed a decline of 18% year-on-year.

  • Operating cash flow slightly declined by 4% to INR 947 crores, largely due to relatively low deliveries of under 1 million square feet.

  • Total income decreased by 3% to INR 1,593 crores.

  • Project approval delays, particularly for Ashok Vihar in Delhi, due to regulatory and court issues.

Key financials

  1. Net Profit ₹600 Cr +15%YoY
  2. Booking Value ₹7,082 Cr -18%YoY
  3. Collections ₹3,670 Cr +22%YoY
  4. Operating Cash Flow ₹947 Cr -4%YoY
  5. Total Income ₹1,593 Cr -3%YoY
  6. EBITDA ₹915 Cr +18%YoY

What they filed

Q1 FY27: revenue up 14.2%, net profit up 8.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue663 185 912 106 92 −86%268 +45%928 +2%121 +14%
EBITDA-40 -181 77 -263 -408 −920%-175 +3%-27 −135%-260 +1%
Net profit206 35 279 56 13 −94%60 +71%219 −22%61 +9%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹7,082 Cr

as of 2025-06-30 quantified

-18% YoY

Inflow this quarter

₹7,082 Cr

Composition

Mix 3 geographies
  • Bangalore ₹3,000 Cr 48.4%
  • Mumbai ₹1,600 Cr 25.8%
  • NCR ₹1,600 Cr 25.8%

Share of order book by geography, derived from disclosed amounts

Pipeline

other

5 new projects added in Q1 FY26 with 9.24 million square feet saleable area and expected booking value of INR 11,400 crores. Total sales potential from 6 new projects/phase launches in Q1 was INR 8,500 crores. The company has a 'humongous' launch pipeline for the year.

This is the eighth consecutive quarter in which Godrej Properties has exceeded INR 5,000 crores of booking value. The company has a 'humongous pipeline' built to comfortably exceed guidance.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹1,460 Cr this quarter · ₹6,500 Cr (FY26/27) planned
    • Construction Outflow (COC) spend ₹1,460 Cr
    • Land acquisition spend this quarter ₹2,000 Cr
    construction-related outflows, which was INR 1,800 crores in 4Q and INR 1,460 crores this quarter? ... I would say that probably last year, our COC spend was about INR 3,500 crores, INR 3,700 crores, something, if my memory serves me right. ... give or take INR 5,500 crores to INR 6,500 crores... give or take 30% to 40% growth on the base value we should have.
  • Debt Net ₹10,000 Cr
    From a debt perspective, we have laid out an absolute cap that we would like to look at for net debt of INR 10,000 crores.
  • Buyback Announced
    The promoters have actually bought back some shares on the market over the last 6 months.
  • M&A 5 new projects Acquisition · Announced

    To scale bookings and earnings, adding to future booking value.

    Estimated booking value of INR 11,400 crores.

    In terms of business development, we started the year on a strong note by adding 5 new projects in estimated saleable area of approximately 9.24 million square feet and an expected booking value of INR 11,400 crores.
  • M&A Panipat project Acquisition · Signed

    Part of BD strategy focusing on opportunistic, fast turnaround deals.

    In fact, if you see the transaction like the Panipat is a completely 100% buyout transaction.
  • Liquidity Liquidity disclosed Operating cash flow of INR 947 crores in Q1 FY26, with FY26 collections target of INR 21,000 crores, expected to fund most business development.
    Operating cash flow slightly declined by 4% to INR 947 crores... We have guided this year for INR 21,000 crores of collections. So, of course, hope to see operating cash flows also at a very healthy level this year. So, I think a lot of the business development should be funded by that.

Guidance & targets

Booking Value

  • Bookings Target Booking Value · FY26 · High confidence INR 32,500 crores
    on track to achieve our bookings target of INR 32,500 crores in FY '26

    — Pirojsha Godrej

Business Development

  • BD Additions Expected Booking Value Business Development · FY26 · High confidence INR 11,400 crores
    In terms of business development, we started the year on a strong note by adding 5 new projects in estimated saleable area of approximately 9.24 million square feet and an expected booking value of INR 11,400 crores. With this, Godrej Properties has achieved 57% of its annual guidance for business development for the full year in the 1st Quarter itself.

    — Pirojsha Godrej

Collections

  • Collections Target Collections · FY26 · High confidence INR 21,000 crores
    We have guided this year for INR 21,000 crores of collections.

    — Pirojsha Godrej

Debt

  • Net Debt Cap Debt · FY26 · High confidence INR 10,000 crores
    From a debt perspective, we have laid out an absolute cap that we would like to look at for net debt of INR 10,000 crores.

    — Pirojsha Godrej

Capex

  • COC Spend Run Rate Capex · FY26/27 · Medium confidence INR 5,500 crores to INR 6,500 crores

    From INR 3,500-3,700 crores (last year) today

    give or take INR 5,500 crores to INR 6,500 crores... give or take 30% to 40% growth on the base value we should have.

    — Gaurav Pandey

Launch Pipeline

  • Total Sales Potential from Launches Launch Pipeline · FY26 · High confidence INR 40,000 crores
    I think the INR 40,000 crore launch guidance we have given for the year is meant to be a number that we should be able to deliver even if there are a few setbacks on the approval side.

    — Pirojsha Godrej

What to watch in Q2 FY26

Ashok Vihar Project Launch Progress

Next quarter (Q2 FY26)
Current Delayed due to approval and court issues, but positive movement in last 6 months.
Target Clearer launch timeline or actual launch.

Why it matters

A key project for Delhi market re-rating and unlocking significant upside, its launch will be a major catalyst.

difficult to give a very accurate timeline for a launch. But if I were to give a sense of relatives, about a year back, things were looking much more difficult, and things are looking much more positive now.

Risks & concerns

  • Project Approval Delays (Ashok Vihar, Delhi)

    high

    Approval authority issues and court views on tree cutting policy are delaying the launch of the Ashok Vihar project in Delhi, making accurate timelines difficult.

    Management acknowledged

  • NGT and Environmental Issues Impacting Launches

    medium

    Potential setbacks from NGT and environmental issues could impact launch timelines, though the company's INR 40,000 crore launch guidance includes buffers.

    Analyst acknowledged

  • Bangalore Ground Rent Issue

    low

    A ground rent issue in Bangalore was mentioned, but management views it as a common sector issue for which project teams find solutions, with adequate buffers in guidance.

    Analyst downplayed

  • IT Services Slowdown in Bangalore

    low

    Analyst raised concern about IT services slowdown affecting Bangalore sales, but management stated they are seeing strong demand and continued sales momentum.

    Analyst downplayed

Q&A highlights

6 direct
New Launches Sell-through and GPL Share Direct
So, whatever we are opening stock between the towers that we open, the floors we open, give or take, between 70% to 90% is what we are selling. ... the GPL share this quarter was a little bit lower than last year because of the large sales in Bangalore, in our JV project, so that was 78% for the quarter.

Clarifies the sales velocity for new projects and the company's attributable share from JV projects.

Asked by Puneet Gulati

Execution and Construction Outflows Partial
See typically, if you see our historical numbers as well, typically, Quarter 4 has a lot of OCs that technically kind of come in. Quarter 1, we just had 0.8 million sort of square feet of OCs, and we did a lot of launches in Quarter 4, if you recollect, which is the initial days of construction mostly about excavation and piling works, which are not, from a COC spend, a very huge item. ... So, I think you would see that uptake in the coming quarter.

Explains the discrepancy between reported execution uptake and lower Q1 deliveries/outflows, indicating a lag effect.

Asked by Puneet Gulati

BD Land Spend and Future Run Rates Direct
For the deals, which we have signed in this year, balance to spend is around INR 900 crores and around INR 1,000 crores or INR 1,200 crores for the earlier deals, which we have signed in '25 and '24, which are milestone-linked payments. ... I think we remain very optimistic on the deal pipeline. So, we endeavor to add projects especially in cities like Bangalore and Mumbai and also to some extent even in Pune. And NCR, we are acquiring a few projects mostly on the plotted side, like in Panipat, you would have recently seen an acquisition, and we have been very selective currently on the NCR acquisition unless we find the valuation very attractive.

Provides clarity on future capital commitments for land acquisitions and the strategic focus for business development.

Asked by Puneet Gulati

IRR for New vs. Old Projects Direct
The underwriting standards when the cycle was starting up to its peak as well were exactly the same that we had even in pre-COVID. ... those have, of course, seen a very dramatic uptick both from an IRR perspective, overall PAT profile and even PAT margins, right? And the deals that we acquired even in the 6 months, at the moment, more or less most of the deals we are seeing an uptick in IRR.

Confirms that recent land acquisitions are yielding strong returns, validating the company's conservative underwriting approach.

Asked by Parvez Qazi

NCR Market Strategy Direct
I think, Parikshit, fortunately, we do have a very strong pipeline in NCR market and a fairly diverse pipeline. ... we have enough and more to kind of sustain the growth for the next 18 to 24 months. And of course, not that I am in any way discounting the opportunity that NCR market will present us. In fact, there is one deal, which is in a fairly advanced stage, but we are negotiating. ... we don't feel the need to be chasing deals if we are finding the valuations unrealistic.

Outlines the company's balanced approach to NCR, leveraging existing pipeline while being selective on new acquisitions based on valuation.

Asked by Parikshit Kandpal

Ashok Vihar Launch Timelines Partial
As frustrating it is, honest and candid answer is that it's a bit of a frustration for us that we have not been able to launch this project for a while. And I think we, in fact, mentioned very candidly in the previous earnings call as well that there has been set of approval authority issues in the government setup on which department grants approval where and how. ... But I don't think so at the current state of data that I get to see, I will be able to give you a very accurate timeline for a launch.

Highlights the ongoing regulatory and court-related challenges impacting a key Delhi project, indicating continued uncertainty despite recent positive movement.

Asked by Parikshit Kandpal

Promoter Share Buyback vs. BD Opportunity Direct
I think we have so much opportunity as a company that I think buybacks, in my view, more something to consider if you are throwing up huge amounts of cash, don't see great deployment opportunities for it. If we can continue to deploy 20% plus IRRs as we seem to be continuing to have opportunities to do, I think it would be more sensible to deploy that. ... if this weakness continues, we may use it as an opportunity to continue to do that.

Clarifies management's capital allocation preference for high-IRR business development over extensive share buybacks, while keeping buybacks as an option if share price weakness persists.

Asked by Puneet Gulati

Unsold Inventory and Sustenance Sales Direct
So, say, about INR 27,000 crores. ... we were 39% at INR 2,700-plus crores of sustenance sales. And I think generally, what's happened is it's very project specific, right? ... So, I think we have a very healthy sustenance ratio.

Provides insight into the company's inventory position and the contribution of sustenance sales, indicating strategic holding of inventory for pricing optimization.

Asked by Varun Julasaria

3 min read 7 chapters

Detailed narrative

Strong Q1 FY26 Performance with Record Net Profit

Godrej Properties reported its highest ever quarterly net profit of INR 600 crores in Q1 FY26, marking a 15% year-on-year growth. This was supported by an 18% increase in EBITDA to INR 915 crores. Despite a 3% decline in total income to INR 1,593 crores, the company demonstrated robust profitability, driven by strong operational performance.

Robust Booking Value and Collections Momentum

The company achieved a booking value of INR 7,082 crores from 4,231 homes across 6.17 million square feet in Q1 FY26, marking the eighth consecutive quarter exceeding INR 5,000 crores. While this represented an 18% year-on-year decline, it translated to a 2-year compounded annual growth rate of 77%. Collections also saw a healthy 22% growth, reaching INR 3,670 crores, indicating strong cash flow generation.

Aggressive Business Development and Extensive Launch Pipeline

Godrej Properties made significant strides in business development, adding 5 new projects with an estimated saleable area of 9.24 million square feet and an expected booking value of INR 11,400 crores. This achievement represents 57% of the annual BD guidance in Q1 alone. The company maintains a 'humongous' launch pipeline for FY26, targeting INR 40,000 crores in new launches across key cities like Gurgaon, Greater Noida, Worli, Versova, Indore, Hyderabad, and Pune.

Strategic Inventory Management and Sustenance Sales

The company reported approximately INR 27,000 crores of launched and unsold inventory, with INR 51,000 crores of collections pending from past sales. Sustenance sales contributed INR 2,700+ crores, representing 39% of total sales. Management highlighted a strategy of holding prime inventory for pricing uptake and noted a 'very healthy sustenance ratio' across projects, demonstrating effective inventory management.

Enhanced Execution Capabilities and COC Spend

Godrej Properties reported a 'very strong execution uptake,' with the Construction Outflow (COC) run rate increasing to INR 1,170+ crores in Q1 FY26 from INR 750 crores in Q1 FY25. The company has implemented a comprehensive turnaround strategy over the last 9 months, focusing on digital infrastructure for laborers, expanding its contractor base, and centralizing procurement to enhance efficiency and ensure timely project completion, with a target COC spend of INR 5,500-6,500 crores for FY26/27.

Calibrated Capital Allocation and Debt Management

The company aims to cap its net debt at INR 10,000 crores, with current balance payments for acquired land totaling INR 900 crores for this year's deals and INR 1,000-1,200 crores for prior deals. Management emphasized funding business development primarily through operating cash flows, which are guided at INR 21,000 crores for FY26, and deploying capital for operational growth at 20%+ IRRs rather than extensive share buybacks, though promoters have bought back shares in the last 6 months.

Delhi Market Potential and Approval Challenges

While expressing excitement about the Delhi market's potential due to strong supply constraints and the 'massive amounts of upside' from the Ashok Vihar project, management acknowledged significant delays. The Ashok Vihar project has faced 'approval authority issues' and court-related complexities regarding tree cutting policy, making it difficult to provide an accurate launch timeline, though the situation has become more positive recently.

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