Godrej Properties Limited

Operational Performance Highlights

Q2 FY27 Performance:

  • Booking value: ₹8,008 crores from sale of 3,658 units
  • Total area sold: 6.2 million square feet
  • Bookings declined 6% year-on-year and 7% quarter-on-quarter
  • Sustenance sales grew 83% year-on-year to ₹5,054 crores
  • Three projects contributed over ₹500 crores each to sustenance sales: Godrej Trilogy (Mumbai), Godrej Vanantara (Bengaluru), Godrej Samaris (Gurugram)
  • Godrej Brooklyn Avenue (Hyderabad) also contributed over ₹500 crores to bookings

H1 FY27 Performance:

  • Booking value: ₹16,669 crores from sale of 7,396 units
  • Total area sold: 12.3 million square feet
  • Bookings grew 7% year-on-year
  • Achieved 43% of annual bookings guidance despite launching only 1/3 of expected annual launch pipeline

Geographical Sales Distribution (Q2):

  • NCR: ~₹2,000 crores
  • Mumbai: ~₹1,900 crores
  • Bangalore: ~₹1,600 crores
  • Pune: ~₹1,000 crores
  • Hyderabad: ~₹700 crores
  • Other cities: ~₹800 crores

Financial Performance

Q2 FY27 Financials:

  • Total income: ₹2,575 crores (38% growth year-on-year)
  • EBITDA: ₹171 crores (72% decline year-on-year)
  • Net profit: ₹154 crores (62% decline year-on-year)

H1 FY27 Financials:

  • Total income: ₹3,912 crores (13% growth year-on-year)
  • EBITDA: ₹717 crores (53% decline year-on-year)
  • Net profit: ₹504 crores (50% decline year-on-year)

The decline in profitability was attributed to the back-ended nature of deliveries this year, with positive momentum expected particularly in Q4.

Cash Flow and Collections

Q2 FY27:

  • Collections: ₹5,318 crores (31% growth year-on-year)
  • Operating cash flow: ₹1,584 crores (300% growth quarter-on-quarter, 33% growth year-on-year)

H1 FY27:

  • Collections: ₹9,666 crores (25% growth year-on-year)
  • Operating cash flow: ₹1,983 crores

Construction and related outflow increased by 31% year-on-year in Q2 and by 42% for H1.

Business Development

Q2 FY27 Additions:

  • Added 1 new project with estimated saleable area of 1.1 million square feet
  • Expected booking value: ₹6,000 crores

H1 FY27 Cumulative:

  • Added 4 projects with estimated saleable area of 9 million square feet
  • Expected booking value: ₹15,500 crores
  • Achieved 78% of full-year business development guidance

Project Deliveries

  • Delivered projects aggregating 2.5 million square feet in Q2
  • On track for 13.5 million square feet of delivery in full year FY27

Future Outlook and Guidance

H2 FY27 Expectations:

  • Target: ₹15,000 crores cash collection
  • Target: ₹7,000 crores operating cash flow
  • Expected to be free cash flow positive in H2
  • Launch pipeline: ₹32,000 crores worth of projects
  • Sales guidance: ₹22,500-25,000 crores for H2

FY28 Expectations:

  • Expect to deliver both positive free cash flow
  • Target: 20% reported Return on Equity (ROE)
  • Exceptional growth of past 2 years to become apparent in reported financials under project completion accounting

Key Projects in Pipeline

Upcoming launches include: Bandra (Mumbai), Sector 63A (Gurugram), Thane Uniabex, Vikhroli projects, Ashok Vihar (Noida), Noida DMIC, Neopolis, Kharadi 2, Mahalunge 2, Vastrapur, and new phases of several existing projects.

Market Share and Growth Strategy

  • Company sales have scaled from ₹8,000 crores annually to expected ₹40,000+ crores in FY27
  • Current market share estimated at ~5% of industry
  • Focus on gaining market share through outstanding design, timely delivery, and high-quality development
  • Strategy includes entering new micro-markets within existing cities rather than expanding to new cities

Joint Venture Updates

  • Settled with Orris during the quarter (arbitration case)
  • Exited JV in Mahalunge previously
  • 5-6 JVs still remaining, expected to exit naturally as projects conclude
  • Moving towards more owned portfolio than JV structure

Pricing Strategy

  • Prices holding up well across markets
  • NCR: Less than 1% price increase (focus on end-user sales)
  • South and Mumbai: ~2% price increase
  • Specific exceptions like Godrej Crown Residences in Noida achieved significant price jumps
  • Strategy focuses on quality of sales rather than optical price maximization

Construction and Approvals

  • 80% of Q3 launch approvals already secured before quarter start
  • Residual approvals expected post-Diwali
  • NGT construction bans factored into historical planning, no additive challenge
  • No restrictions on launches even during worst times in NCR

Regional Focus

  • Priority markets for business development: Bangalore, Mumbai, Noida
  • Considering opportunities in Kolkata and Ahmedabad beyond top 5 markets
  • Chennai may be next market entry for group housing, but not immediate priority
  • Focus on entering more micro-markets within existing cities

Sales Mix Strategy

  • Historical mix: 60% launch sales, 40% sustenance sales
  • Q2 saw 63% sustenance, 37% launch due to approval delays
  • Flexibility to adjust mix based on approval timelines
  • Building capabilities for sustained sustenance sales performance