Target: ₹2,475
CMP: ₹1,809.50
Godrej Properties (GPL) reported Q4 net profit (pre-ex) of ₹650 crore, over 70 per cent up year on year, driven by revenue beat which jumped 63 per cent to a record ₹3,460 crore. Reported P&L remains volatile on a q-o-q and the beat was driven by a significant uptick in deliveries with GPL completing 7.4-million-sq-ft projects during the quarter; taking FY26 deliveries to 12.1 million sq ft, above 10 million sq ft guidance.
The management guided for 14 per cent rise in pre-sales to ₹39,000 crore for FY27E. The company plans to launch ₹48,000-crore worth of projects in FY27E (vs ₹42,200 crore in FY26), which should help drive pre-sales momentum. While outlook on broader property markets is mid-cycle growth levels; the company said that guidance is subject to geopolitical situation not deteriorating.
GPL’s reported P&L and FCF generation have improved with PAT over 32 per cent in FY26 and 95 per cent of large land/project expenditure internally funded. The management focus on scaling up deliveries by FY28 to over 20 million sq ft, large pre-sales in base and rising customer collections make us believe that the 20 per cent reported ROE target and net FCF positive are possible by FY28.
The stock is trading at 11x PE on reportable PAT/embedded PAT in FY28 P&L/FY26 pre-sales estimates. Our ₹2,475 PT (₹2,420) is set at 12.0x embedded PAT to March 2028 pre-sales. Maintain Buy.