Godrej Properties Share Price Target at Rs 2,515: ICICI Securities
ICICI Securities has upgraded its call on Godrej Properties (GPL) to a “BUY” with a revised target price of Rs 2,515, citing the firm’s record-breaking sales performance in FY25 and strong outlook for FY26 and beyond. Godrej Properties has decisively turned investor heads by exceeding its FY25 guidance with sales bookings of Rs 294 billion, marking a 31% year-over-year surge. The fourth quarter alone contributed Rs 101.6 billion in gross bookings, bolstered by high-value launches across key markets such as Noida, Gurugram, and Hyderabad. ICICI Securities has accordingly revised its stance to a “BUY,” setting a target price of Rs 2,515, a significant upside from the current levels. As the company continues aggressive land acquisitions and project launches while balancing debt levels, its sustained cash flow and operational leverage are seen as critical to future valuation growth.
Record Sales Bookings and Strong Launches Underpin FY25 Performance
Godrej Properties clocked all-time high sales bookings of Rs 294 billion in FY25, comfortably surpassing its guidance of Rs 270 billion. The company’s Q4FY25 gross bookings alone amounted to Rs 101.6 billion, powered by new launches in major metros. With a projected booking estimate of Rs 305 billion for FY26 and Rs 312 billion for FY27, the momentum appears far from over.
The company achieved a CAGR of 55% in gross sales bookings between FY22 and FY25, a performance ICICI views as indicative of GPL's robust execution capabilities and its ability to convert this momentum into consistent operating surplus.
Operational Surplus and Cash Flow Resilience a Key Highlight
GPL has reported operating cash surplus (ex-land/tax/interest) of Rs 34.3 billion in 9MFY25. For FY24, the company had generated Rs 43 billion in operating surplus, which supported its land capex plans of Rs 54 billion during the year.
In FY25, land capex is expected to touch Rs 70 billion, backed by QIP proceeds of Rs 60 billion, showcasing GPL’s commitment to future-ready expansion. This high capital deployment is intended to sustain the top line and secure new launches, though net debt management remains a watch-point.
Strategic Land Acquisitions Surpass FY25 Guidance
GPL added projects worth Rs 265 billion in FY25—a significant overshoot from its initial guidance of Rs 200 billion. These acquisitions are spread across India’s booming real estate hubs and are seen as catalysts for future booking and revenue flows.
As of December 2024, net debt stood at Rs 38 billion. While manageable in context, any aggressive expansion without a parallel uptick in cash flows could invite investor caution.
Financial Projections and Valuation Metrics Remain Strong
| Metric | FY24 | FY25E | FY26E | FY27E |
|---|---|---|---|---|
| Revenue (Rs mn) | 30,356 | 55,000 | 82,500 | 99,000 |
| Net Profit (Rs mn) | 7,471 | 9,752 | 13,868 | 17,527 |
| EPS (Rs) | 26.9 | 32.4 | 46.0 | 58.2 |
| RoCE (%) | 6.0 | 8.8 | 14.1 | 16.5 |
| P/E Ratio (x) | 71.7 | 59.5 | 41.8 | 33.1 |
Valuation remains attractive post the 27% correction in the stock over the past three months, providing an appealing entry point for long-term investors.
Segmental Valuation and NAV Upside
ICICI's SoTP-based valuation reflects an aggressive yet achievable upside. The breakdown includes:
Development value: Rs 1,548/share
Office and hospitality assets: Rs 149/share
Vikhroli development: Rs 112/share
Business development premium: Rs 838/share
This translates to a revised target price of Rs 2,515/share, up from the previous Rs 2,482.
Risks: Monitoring Residential Demand and Price Traction
Despite the bullish tone, ICICI flags two primary risks:
A potential slowdown in residential real estate demand, which may impact sales velocity.
Muted pricing trends that could cap revenue growth from premium launches.
These externalities could dent booking estimates and affect the firm’s ability to sustain cash flows at the projected pace.
Stock Performance and Market Sentiment
Over the past 12 months, GPL's share price has dropped nearly 23%, underperforming the broader Sensex. However, institutional interest has been resilient with FIIs marginally increasing their stake from 28.8% to 30.9% as of December 2024.
This underperformance, juxtaposed with strong fundamentals and forward-looking earnings, positions the stock for a potential rebound.
Conclusion: Godrej Properties Ready for Its Next Growth Leg
ICICI’s upgraded “BUY” call on Godrej Properties comes on the back of substantial operational achievements, robust booking trends, and prudent capital allocation. The stock’s recent correction presents an opportune entry point, with a target price of Rs 2,515 offering significant upside from current levels. Investors should monitor sales conversion efficiency and debt leverage as key indicators of sustained momentum.