The company’s management, in its post-earnings conference call, said the overall Indian residential market has been very strong in the first half with absorption increasing by 10% to 25% in many markets.
Business development guidance is intentionally conservative, aiming for replacement of sales rather than aggressive expansion, with a healthy level expected to be roughly equivalent to sales.
The company said business development in the June quarter achieved 48% of the annual guidance, significantly driven by a ₹7,000 crore Noida land option win.
While not aggressively driven, two to three new cities might be added for projects with super attractive margin profiles, as the current land values align with their 20% IRR and 15% margin expectations, the Godrej Properties management said.
It has also anticipated FY27 can be free cash flow positive, with the fourth quarter being the strongest one, and it is very confident the next fiscal would be free cash flow positive.
The company said a structural shift is occurring in the NRI market, especially from the Middle East, with customers now viewing India as a potential relocation option rather than solely an investment.
Godrej Properties also noted that the exact launch timelines are difficult to predict due to the potential approval delays, which can shift the focus to sustenance sales, though a robust launch pipeline exists for the year.
It noted a 2.6% minimum wage increase, which was planned for, but the West Asia crisis created a “strange scenario” for supply chains until May end.
From June onwards, the trends started reversing, with steel costs reducing by almost 12% and lift systems witnessing a marginal cost drop, the company said.
The management achieved 22% of its annual booking value guidance for the financial year in the first quarter.
It said the operating cash flow in the June quarter was weak at ₹399 crore, a 68% decline. However, it is expected to meaningfully increase for the rest of the year to approximately ₹9,000 crore for the full year, the management added.
Q1 Results
Godrej Properties reported its first quarter earnings on Tuesday.
Its net profit declined 42% to ₹350 crore from ₹600 crore last year, while its other income reduced to ₹839 crore from ₹1,186 crore.
The company’s revenue was up 16% at ₹506 crore in the first quarter from ₹435 crore in the previous fiscal.
It reported an earnings before interest, taxes, depreciation and amortization (EBITDA) loss of ₹285.5 crore compared to an EBITDA loss of ₹243 crore in the year-ago period.
The company said it is on track to meet or exceed its guidance on all parameters for the financial year 2027, adding that its booking value of ₹40,000 crore would be delivered and recognized in P&L by FY28.
Cumulatively for Financial Year 2027 and 2028, Godrej Properties is eyeing operating cash flow to be between ₹20,000 crore to ₹22,000 crore, while collections are likely to be between ₹52,000 crore to ₹55,000 crore.
It added that it would be free cash flow positive by FY28.
Stock reaction
Shares of Godrej Properties are trading 4% higher on Wednesday at ₹2,116.5. The stock is up 5% so far for the year and is the top gainer on the Nifty Realty index today.
Also Read: ASK Automotive shares jump 15% to a record high after record Q1 revenue and profit
