Detailed Narrative
Robust Q2 FY26 Performance Driven by Strong Bookings
Godrej Properties reported its highest ever Q2 net profit of INR405 crores, a 21% year-on-year increase. The company's booking value for the quarter surged 64% YoY and 20% QoQ to INR8,505 crores, marking the ninth consecutive quarter of sales exceeding INR5,000 crores. Total income for Q2 FY26 grew 39% to INR1,867 crores, while EBITDA saw a significant 118% increase to INR614 crores. For the first half of FY26, booking value reached INR15,587 crores, the highest ever, achieving 48% of the annual guidance of INR32,500 crores.
Key Project Launches Fuel Sales Growth
Sales in Q2 FY26 were primarily driven by strong demand for several new project launches. Godrej Regal Pavilion in Hyderabad achieved INR1,527 crores in booking value, contributing to Hyderabad's total sales of INR2,600 crores for the current calendar year. In Bangalore, Godrej MSR City recorded INR1,032 crores, and Godrej Tiara along with another project contributed INR877 crores. The company's first project in Indore also saw robust returns with over INR400 crores in booking value.
Collections Lag Bookings, Skewed Towards Q4
Despite strong booking growth, collections in Q2 FY26 grew only 2% YoY and 11% QoQ to INR4,066 crores. H1 FY26 collections stood at INR7,736 crores, a 10% YoY increase. Management acknowledged that collections are currently low relative to bookings but expressed confidence in achieving the full-year guidance of INR21,000 crores. This skew is attributed to milestone-linked payments, particularly a heavy Occupation Certificate (OC) calendar expected in Q4, and rapid ramp-up in construction activity.
Strategic Business Development and Market Outlook
In H1 FY26, Godrej Properties added 9 new projects with an estimated saleable area of 15 million square feet and an expected booking value of INR16,250 crores, achieving 81% of its annual BD guidance. Management highlighted strong growth opportunities across all markets, with Bangalore currently being the best-performing. Hyderabad, a new entry, has shown significant potential with INR2,600 crores in sales this calendar year. The company also noted its strategy for the Worli project, aiming for profit maximization through gradual inventory release and pricing between INR80,000 to INR1.5 lakhs per square foot.
Execution and Profitability Challenges Addressed
Management addressed concerns regarding profitability, explaining that reported net profit is affected by accounting dislocations for fast-growing companies using the project completion method. However, execution has seen significant improvements, with labor strength increasing from 21,000 to 32,000 and construction spend growing 82% YoY in Q2. While external challenges🌐 like NGT issues in NCR and past COVID-related delays have impacted timelines, the company is confident in delivering 4,000 homes in NCR over the next 6-9 months and achieving its FY28 ROE target of 20% and PAT of INR4,000-4,500 crores.
FY26 Operating Cash Flow Guidance
For FY26, Godrej Properties provided an operating cash flow guidance range of INR6,500 to INR8,500 crores. This projection reflects the company's internal aspirations to speed up construction and capitalize on strong collections. Management emphasized that while there might be minor quarter-to-quarter fluctuations, the overall trend for operating cash flow growth should mirror sales growth in the long term, supported by increased billing milestones.