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Informist, Tuesday, Aug. 4, 2026

 

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--Godrej Prop: Operating cashflow weak in Q1, to go up meaningfully ahead
--CONTEXT:Comments by Godrej Properties' mgmt in post-earnings investor call
--Godrej Prop: Input cost inflation high in Q1 due to W Asia war impact
--Godrej Prop: See cost overrun on global situation worsening as small risk
--Godrej Prop: See rise in construction outflow FY27 about same as in FY26
--Godrej Prop: See Q2 collections better than Q1, strongest in Q4
--Godrej Prop: See FY27 operating cashflow at INR 90 billion
--Godrej Prop: Don't want to enter tier 2 cities if margin profile not good
--Godrej Prop: See Q2 project launch calendar on track

 

By Rajesh Gajra and Ashutosh Pati

 

MUMBAI – Godrej Properties Ltd.'s net operating cash flow of INR 3.99 billion for the June quarter was "very weak" but will "meaningfully" rise in the remaining quarters of the financial year 2026-27 (Apr-Mar), the management told analysts and investors in a post-earnings call Tuesday. ­The management expects a net operating cash flow of INR 90 billion for FY27, which means it expects the cash flow to be around INR 86 billion in Jul-Mar.

 

The company expects net operating cash flow to catch up in the rest of FY27. Operating cash flow varies on a quarterly basis due to volatility in collections, which is dependent on bookings, construction progress and milestones achieved, and deliveries, the company said in an earnings investor presentation.

 

In the June quarter, the company had deliveries of 900,000 sq. ft. as against 7.4 million sq. ft. in the trailing quarter, due to which collections reduced sequentially by INR 36 billion, the company said. At the same time, the pace of construction had increased, resulting in cash outflow, it said.

 

Godrej Properties had earlier guided for customer collections of INR 240 billion in FY27. There will be a build-up in collections and cash inflow through the rest of the year, a senior official said. In the case of collections, "you will see Q2 (Jul-Sept) (being) significantly better than Q1 (Apr-Jun). Q3 (Oct-Dec) should be better than Q2 and then Q4 (Jan-Mar) should be quite strong," the official said.

 

There are good opportunities, "but, I think, honestly, the main focus for this year (FY27) is to make sure we make a lot of construction progress," he said. While some of the collections from projects will come in FY27, "a big portion will also happen next year (FY28) upon delivery", the official said.

 

The project launch calendar is on track for the September quarter, according to the management.

 

On 54% on-year increase in construction outflow in the June quarter to INR 22.44 billion, the management said it will try and limit the outflow increase for FY27 to be around the same rate reported for FY26. "In certain projects, the outflow will be more on core and shell. Certain projects could be more on finishing," a senior official said.

 

The management said the West Asia crisis had had an impact on input costs in the June quarter, as was expected. The risks to free cash flows from project delays or cost overruns are relatively small because of the global situation worsening, a senior official said. "We are only putting in capital when projects are going to generate higher than 20%" return on investment, he said.

 

Asked whether the company would add a few more tier-2 cities to its project pipeline, the management said it had in the recent past gone to Indore in Madhya Pradesh, Faridabad in Haryana, Nagpur in Maharashtra, and other cities. The criterion for entering a new city is a high profit-after-tax margin on strong booking value, it said. If the margin profit is not "super attractive, we don't want to actually enter a tier-2 city," a senior official said.

 

Godrej Properties reported its June quarter earnings Tuesday. The consolidated net profit of the company fell 42% on year to INR 3.50 billion while revenue from operations increased 16% on year to INR 5.06 billion. Its shares ended at INR 2,033.60 on the National Stock Exchange, down 2.7% from Monday.  End

 

Edited by Rajeev Pai

 

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