Godrej Properties Limited (GPL) enters FY26 with mixed quarterly financials but a structurally strong operational backbone. While revenue recognition remains volatile due to project timing and elevated construction costs, booking momentum has accelerated sharply, supported by robust demand across Mumbai Metropolitan Region and other high-velocity micro-markets. Despite a negative EBITDA in Q3FY26, profitability improved at the net level due to substantial other income. The company’s aggressive launch pipeline, inventory expansion, and joint venture consolidation provide medium-term earnings visibility. Geojit’s valuation at 2.1x FY28E book value signals confidence in sustained presales growth and margin normalization.

Operational Performance: Bookings Surge Despite Recognition Volatility

Booking Value Rose 54.6% YoY in Q3FY26, driven by the sale of 3,973 homes covering 6.43 million sq ft — a 57.9% increase in volumes. The standout contributor was Mumbai’s Metropolitan Region, generating Rs. 3,239 crore in bookings, supported by the launch of Godrej Trilogy at Worli.

Customer Collections Climbed 39.5% YoY to Rs. 4,282 crore, reflecting healthy demand conversion. Additionally, GPL delivered ~1.7 million sq ft across three cities during the quarter.

However, reported revenue declined 48.6% YoY to Rs. 498 crore due to timing of project deliveries, underlining the inherent lumpiness in real estate accounting.

Margins Under Pressure: Construction Costs Weigh on EBITDA

Despite booking momentum, profitability at the operating level remained subdued.

EBITDA turned negative at Rs. -197 crore in Q3FY26, primarily due to:

Material cost escalation (+39.8% YoY)

Employee expense increase (+13.9%)

Other expense growth (+13.4%)

That said, the company reported a 22.5% YoY rise in PAT to Rs. 194 crore, aided by a sharp 97.5% jump in other income.

This divergence between operating and net performance highlights temporary cost pressures rather than structural deterioration.

Financial Trajectory: FY26–FY28 Earnings Recovery Visible

Geojit’s revised projections reflect near-term softness but a strong earnings ramp-up from FY27 onward.

EPS is projected to grow at a CAGR of roughly 22% between FY26 and FY28, supported by improved delivery execution and monetization of the launch pipeline.

Pipeline Strength: Multi-City Expansion Driving Visibility

The company added three new projects covering ~7.3 million sq ft with a potential booking value of ~Rs. 8,400 crore in Q3FY26 alone.

During the first nine months, GPL added 12 projects spanning 22.36 million sq ft with estimated booking value of nearly Rs. 24,650 crore.

Inventory rose by Rs. 19,000 crore in 9MFY26, reflecting:

Rs. 5,000 crore construction cash flow

Rs. 5,400 crore land acquisition

This inventory build-up positions GPL for sustained revenue recognition through FY27–FY28.

Balance Sheet and Leverage: Controlled Risk Profile

While debt levels remain elevated due to aggressive land acquisitions, leverage metrics show improvement over the forecast horizon.

Improving ROE and declining leverage reinforce medium-term capital efficiency.

Valuation Case: Rolling Forward to FY28

Geojit values GPL at 2.1x FY28E book value per share, arriving at a target of Rs. 2,096.

Current valuation metrics:

FY26E P/E: 20.3x

FY27E P/E: 16.1x

FY28E P/E: 13.7x

The compression in forward multiples suggests improving earnings visibility.

Given the stock’s 52-week range of Rs. 2,505 – Rs. 1,476, current levels provide an attractive entry point for investors with a 12-month horizon.

Investment Strategy: Levels for Investors

Current Market Price: Rs. 1,800
Target Price: Rs. 2,096
Upside Potential: ~16%

Accumulation Zone: Rs. 1,700 – Rs. 1,820
Support Levels: Rs. 1,650
Medium-Term Resistance: Rs. 2,100

Investors should consider staggered accumulation, especially on dips toward key support bands.

Risks to Monitor

Cost Inflation: Sustained material inflation could delay margin recovery.
Revenue Recognition Volatility: Project completion timing remains unpredictable.
Leverage Sensitivity: Interest rate fluctuations may impact funding costs.

Bottomline: Tactical Weakness, Structural Strength

Godrej Properties stands at a strategic inflection point. Short-term earnings volatility has masked robust booking momentum and an expanding development pipeline. While FY26 revenue recognition remains uneven, the structural growth narrative is intact, underpinned by multi-city expansion, resilient housing demand, and disciplined capital deployment.

At 2.1x forward book value, the stock offers a compelling risk-reward profile. For investors willing to ride through quarterly noise, GPL presents a well-capitalized realty play positioned for earnings acceleration over FY27–FY28.