- Bookings jumped 54.6% YoY to ~₹8,400 cr, driven by a 57.9% volume surge.
- EBITDA stayed negative due to a 39.8% spike in material costs, but PAT rose 22.5% on record other income.
- Three new projects add ~7.3 mn sq ft of saleable area, anchored by the high‑margin Godrej Trilogy in Worli.
- Analysts upgraded the stock to BUY with a target of ₹2,096 (2.1× FY28E BV), implying ~30% upside from current levels.
- Sector‑wide material‑cost pressure and rising labor expenses are eroding margins across Indian developers.
You missed the quiet boom in Godrej Properties' bookings, and your portfolio felt it.
Jio Financial Services Shows Technical Turnaround – Buy Near ₹300, Target ₹340
Godrej Properties' Booking Explosion: Numbers Behind the Surge
In Q3FY26 the developer logged 3,973 home sales covering 6.43 mn sq ft, pushing total bookings up 54.6% YoY. The Mumbai Metropolitan Region alone contributed ₹3,239 cr, with the newly launched Godrej Trilogy at Worli accounting for ₹1,742 cr. Three fresh projects, together offering ~7.3 mn sq ft, bring an additional potential booking pipeline of roughly ₹8,400 cr.
Why the Margin Pressure Is Not a Deal‑Breaker for Godrej Properties
EBITDA slipped to a negative ₹197 cr because material costs surged 39.8% YoY, employee expenses rose 13.9%, and other operating costs climbed 13.4%. However, the profit‑after‑tax (PAT) rose 22.5% to ₹194 cr, powered by a 97.5% jump in other income—primarily from fair‑value gains on investments and non‑core asset disposals. In the Indian real‑estate arena, rising input costs are a sectoral theme, but developers with strong land banks and premium‑segment focus, like Godrej, can offset the drag through pricing power and ancillary income streams.
Sector Trends: Material‑Cost Inflation and the Premium‑Housing Premium
India’s construction sector is grappling with a near‑40% surge in cement, steel, and finished‑good prices, a trend that has squeezed margins for mid‑tier builders. Premium‑segment developers—Godrej, Oberoi, and Lodha—are better positioned because they can command higher per‑square‑foot prices and enjoy a more resilient buyer base. Historically, during the 2018‑19 cost‑inflation cycle, premium players maintained earnings stability while volume‑focused peers saw double‑digit earnings declines.
Competitive Landscape: How Tata Housing and Adani Enterprises Are Reacting
Tata Housing has leaned into affordable‑housing schemes in Tier‑II cities, buffering cost pressure with higher volume but lower per‑unit margins. Adani Enterprises, still nascent in residential development, is leveraging its logistics footprint to secure lower material costs for its upcoming projects. Both firms are watching Godrej’s premium‑segment rollout; a sustained booking surge could force them to re‑price or accelerate their own luxury projects to protect market share.
Historical Context: What the 2016‑18 Godrej Upswing Tells Us
During FY16‑FY18 Godrej Properties recorded a similar booking acceleration (≈45% YoY) after launching its first high‑end towers in Mumbai. The stock rallied ~38% over 12 months, and the company’s book‑value per share grew from ₹150 to ₹215, driven by land‑bank revaluation. That period also featured a temporary EBITDA dip due to aggressive land‑acquisition costs—mirroring today’s cost‑inflation challenge. The eventual recovery was anchored in premium pricing and disciplined capital allocation.
Technical Snapshot: Valuation Rationale Behind the ₹2,096 Target
The analyst team applied a 2.1× FY28E book‑value multiple, reflecting a modest premium to the sector’s historical average (≈1.8×). At the projected FY28E BV per share of ₹998, the target translates to a 30% upside from the current market price of ~₹1,600. The multiple accounts for expected margin improvement as material‑cost inflation eases post‑FY27 and as the new projects reach completion, unlocking higher realized margins.
Investor Playbook: Bull vs. Bear Cases
Bull Case: Continued premium‑segment demand in Mumbai and Bengaluru, successful handover of Trilogy and other high‑margin projects, and a gradual normalization of input‑cost inflation push EBITDA into positive territory by FY27. The stock outperforms the sector, delivering >30% upside.
Bear Case: Prolonged cost‑inflation erodes margins faster than anticipated, delayed project completions trigger cash‑flow strain, and a broader slowdown in luxury home demand due to higher borrowing rates. In this scenario, the stock could trade below the current price for 12‑18 months.
Given the balance of quantitative upside and manageable downside, a BUY rating with a target of ₹2,096 aligns with a medium‑term, risk‑adjusted growth thesis.