The brokerage said the real estate developer’s pre-sales momentum is likely to be weaker than expectations. The company’s valuations also look stretched, Nomura said.
Its valuations, at 135% premium to net asset value (NAV) is much higher than mass market peers such as Macrotech. Meanwhile, Godrej Properties’ pre-sales growth guidance of 10% for FY26 is lower than Macrotech and Prestige’s 20% and 50%, respectively, from the previous year, the brokerage added.The brokerage expects Godrej Properties to report pre-sales of ₹31,000 in the financial year 2026, 5% lower than its guidance of ₹32,500 crore. This is on weaker-than-expected sales from new launches amid fading exuberance among buyers in India’s real estate market, it said.
Pre-sales growth in the medium term could be slower than its aspirational goal of 20% compound annual growth rate (CAGR), as new business development trends do not inspire confidence in the company’s ability to sharply scale up new launches, Nomura said.
The company’s volume-driven strategy poses a risk of further equity dilution and execution challenges, Nomura said.
The challenges to execution are visible, given the deliveries, it added.The key upside risks include stronger-than-expected sales from new launches and stronger-than-expected new launches or business development.
Weaker-than-expected performance of some key projects is the catalyst.
In May, Godrej Properties MD and CEO Gaurav Pandey told CNBC-TV18 that the company was looking forward to a delivering ₹21,000 crore of collections over an actual ₹17,000 crore of last year.
Godrej Properties’ net profit for the March quarter declined 19% from the previous year to ₹382 crore, while revenue increased 49% to ₹2,122 crore. Its earnings before interest taxes depreciation and amortisation declined by 10% from the previous fiscal and its margins narrowed to 5.2% from 8.6% in the year-ago period.
Of the 21 analysts that have coverage on the stock, 16 have a “buy” rating, one has a “hold” rating and four have a “sell” rating.
Shares of Godrej Properties were down 2.05% at ₹2,263 apiece at 9.25 am on Wednesday, July 9. The stock has declined 18.5% this year, so far.
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