Godrej Properties' Q2 profit falls 62%; brokerage keeps Buy with ₹2,200 target

Motilal Oswal Research kept its Buy rating on Godrej Properties on 26 October 2026 and reduced its target price to ₹2,200 per share. The call came after the company reported a steep fall in second-quarter profit. The brokerage's post-results note, led by analyst Harsh Pathak, said the company's focus on generating better free cash flow in the coming quarters supports its view.

In its results announced on 23 October 2026, the company reported net profit of ₹154 crore for the quarter ended September 2026 (Q2 FY27). That was down 62% from ₹405 crore a year earlier. Total income rose 38% to ₹2,575 crore, while EBITDA fell 72% to ₹171 crore.

Costs outran revenue

The company attributed the profit decline mainly to higher operating costs. Total expenses rose 90.4% year on year, driven largely by higher raw material costs. Some property launches were also deferred to the third quarter. The company's managing director and CEO, Gaurav Pandey, described the quarter as a strong operating quarter, citing sales figures.

• Q2 booking value: ₹8,008 crore, from 3,658 units and 6.2 million sq ft (₹8,505 crore in Q2 FY26)
• H1 FY27 booking value: ₹16,659 crore, up 7%, the company's highest first-half figure
• Q2 collections: ₹5,318 crore, up 31% year on year
• Q2 operating cash flow: ₹1,584 crore
• Sustenance sales: ₹5,054 crore, up 83% year on year

Booking value in the quarter was lower than a year earlier. The first-half figure was higher, which shows the weaker quarter was offset partly by earlier months. Collections grew faster than bookings, which the brokerage links to its cash flow view.

Pipeline, guidance and the Marine Lines deal

Motilal's note says the company added ₹15,500 crore of gross development value (GDV) in the first half of FY27. This includes about ₹9,000 crore of group housing in the National Capital Region, which is an aggregate figure, and ₹500 crore of plotted development in Chennai. A new Marine Lines project in Mumbai added a further ₹6,000 crore. The company says these additions take it to 78% of its annual business development guidance of ₹20,000 crore.

The company launched projects worth ₹5,500 crore in Q2 and ₹16,000 crore in the first half. It plans launches worth ₹32,000 crore in the second half. It still expects pre-sales of ₹39,000 crore in FY27, up 14%. Motilal models a 10% compound annual growth rate in pre-sales to ₹41,300 crore over FY26 to FY28, and expects cumulative net operating cash flow of ₹20,000 crore to ₹21,000 crore over FY27 and FY28.

The Marine Lines project is a development agreement, filed with the stock exchange on 28 September 2026, for a land parcel of about 2.5 acres in South Mumbai. The partner, Man Infraconstruction Ltd (MICL), will recoup about ₹300 crore of its existing investment in the project. The company's revenue potential estimate is about ₹6,000 crore. The material we reviewed does not give unit count, pricing or launch timing.

On leverage, the note says net debt rose in Q2 because of project additions, but that leverage remains comfortable.

What investors will watch

Shares fell after the results. Reports put the decline at about 4.4%. Motilal's Buy rating rests on its view that cash flow will improve over the coming quarters and that profitability will improve over the medium term. Its target is lower after it revised its financial assumptions. The brokerage did not explain the link between those changes and the cut beyond its own wording.

The next checks are the launches deferred to the third quarter and progress against the second-half targets. The company has said it expects ₹15,000 crore of collections and ₹7,000 crore of operating cash flow in the second half of FY27. Investors will also track whether costs ease, since expenses drove the quarter's profit fall, and whether net debt stays comfortable as new projects are added.