Godrej Properties Q1 Results Review: Jefferies Eyes Strong Launch Pipeline, Forecasts Improved Cash Flow

Jefferies has cut its target price for Godrej Properties Ltd., post first-quarter results for fiscal 2025-26, citing a soft start and improvement ahead. The brokerage maintained its 'buy' rating on the stock and cut the target price to Rs 3,000 from Rs 3,200. The target price is set at 15 times embedded profit to June 27 pre-sales.

The brokerage noted that 10% sales growth guidance looks achievable given the strong launch pipeline and an upfronted project add. "Operating cash flow and project delivery performance should also improve in quarters ahead, as per seasonality," it added.

The brokerage has changed its FY26/FY27 pre-sales estimates by 0%/+3% and earnings by +12%/+1%, with the FY26 earnings uptick driven by other income.

"The revenue increases are larger and mostly accounting driven. Post the recent correction, the stock is trading at less than 2.0 times FY26 EV/pre-sales and approximately 12 times FY26E embedded PAT," it added.

The company reported a Q1 net profit of Rs 600 crore, 15% growth year-on-year, and a headline beat on a large other income, which was driven by stake sale-driven fair valuation gains in certain lease assets.

Jefferies highlighted that the management has guided for 10% year-on-year sales growth to Rs 32,500 in FY26E, which implies 22% growth in the next 9 months. The company highlighted a strong and well-distributed launch pipeline for the remainder of FY26. The demand conditions are still deemed to be strong and in line with the middle of a property cycle.

"Despite news flow of tech-industry job losses, management said that its projects continued to sell well in July in tech-industry-driven Bengaluru," it added.