Godrej Properties share: Jefferies, Nomura, Morgan Stanley diverge on outlook after soft Q1

Brokerage views on Godrej Properties remain mixed after the real estate developer reported a slow start to FY26 with muted pre-sales and rising debt levels. While Jefferies maintained a ‘Buy’ call citing a strong launch pipeline and improving cash flows, Nomura reiterated a ‘Reduce’ rating, flagging risks to sales targets and execution. Morgan Stanley, meanwhile, maintained an ‘Equal-weight’ view.

Jefferies on Godrej Properties share: Sales growth achievable, optimism intact

Rating: Buy | Target Price: ₹3,000
Jefferies acknowledged that Q1FY26 was an expectedly slow quarter, with pre-sales down 18% YoY due to a high base. Net debt rose by ₹14 billion sequentially. Despite the weak start, the brokerage believes the 10% sales growth guidance for FY26 is achievable, citing a strong project launch pipeline and front-loaded project additions.

The management’s continued optimism on demand conditions and expectations of improved operating cash flow and delivery performance in the upcoming quarters, in line with seasonal patterns, also supported Jefferies’ positive stance. However, it trimmed the target price from earlier levels to reflect the Q1 softness.

Nomura on Godrej Properties share: Delivery, collections disappoint; valuation premium a concern

Rating: Reduce | Target Price: ₹1,900
Nomura termed the Q1FY26 performance “unimpressive”, projecting that FY26 pre-sales could fall 5% short of guidance due to weaker-than-expected uptake in new launches. It also warned that medium-term sales growth may fall short of the aspirational 20% CAGR, citing concerns over the company’s volume-led strategy.

Key concerns raised include the risk of further equity dilution, slower delivery momentum, and an overvaluation relative to peers — Godrej Properties trades at a 100% premium to NAV, significantly higher than its mass-market competitors. Operational cash flow and delivery performance were weak in Q1, and Nomura indicated that these will need close monitoring going forward.

Morgan Stanley on Godrej Properties share: Mixed bag; maintains equal-weight stance

Rating: Equal-weight | Target Price: ₹2,400
Morgan Stanley found Q1FY26 pre-sales at ₹70.8 billion to be in line, although they dropped 30% QoQ and 5% over the last twelve months (LTM). The company retained its FY26 pre-sales guidance of ₹325 billion, of which 22% has been achieved in Q1. A strong launch pipeline and ₹270 billion worth of unsold inventory support the outlook.

However, collections fell sharply by 47% QoQ to ₹36.7 billion, while net operating cash flow declined 1% QoQ and 38% YoY to ₹9.5 billion. The net debt-to-equity ratio rose from 19% to 26%, following a ₹21 billion acquisition that now covers 60% of the ₹114 billion business development target.

Summary of brokerage views on Godrej Properties:

Disclaimer: This article is based on brokerage reports and is for informational purposes only. It does not constitute a recommendation or investment advice. Investors should consult their financial advisors before making investment decisions.