On annuity income approaching INR1,000 crores potential, with your share INR230-250 crores, any plans of monetizing? When do you hit INR1,000 crores of rentals?
No immediate plans of monetizing this. I don't have a clear sense of exactly when we'll get to that INR1,000 crores milestone but certainly I see this continuing to go up. There could also be opportunities to consolidate share rather than divest. I see this increasing steadily over the next few years.
On net debt and free cash flow - should one think about FCFE positive for FY27?
It's a little uncertain for FY27. At the guided business development levels, I think it will be FCF positive. Whether we go above it will depend on the quality of opportunities. Speaking slightly longer term, directionally business development investments won't need to scale up dramatically from here. We had a step jump in BD - we did see the opportunity in the early stage of the cycle. From here we're looking at consistent 20% growth on a much higher base. The level of BD as a percentage of existing projects and operating cash flow will keep coming down. I expect FY28 to be strongly free cash flow positive. FY27 will depend on how much business development we do - could be, but it may not be also.
You mentioned BD spend in FY27 is uncertain. Your INR20,000 crores GDV guidance is half of what you achieved in FY26 - would you aim at beating that or just be opportunistic?
It's really a question of opportunities we see. We don't focus too much on BD guidance and have kept it steady. We're aware of stakeholders wanting us to demonstrate free cash positive on a more consistent basis. Very confident of FY28 being a year where collections and earnings see a step jump as newer projects reach revenue recognition. This is a transition year. If we only add projects with INR20,000 crores we'll certainly be FCF positive. If we add something closer to what we did last year, I think we'll be about breakeven on free cash. FY28 is a year where I expect to generate a lot of cash for business development.
On the recent interview - in the INR5 trillion market cap reference, where does Godrej Properties sit in the broader picture?
It is quite high. We refrain from giving company level guidance on this. But perhaps you can get an idea of where we think it sits by the fact that we bought back 5% of the company last year, including most of that in Q4.
Construction costs - we've seen a 62% jump. Should we think INR2,000 crores per quarter levels or another large jump ahead?
We'd see consistent growth - percentage will be in double digit, may not be as massive as last year, but endeavour to push as much as possible to secure OC plan for FY28. Some of these launches will also determine construction spend. Good Q1 and Q2 launches will have positive upside on construction. From an operating cash flow perspective most of it will get covered from launch collections itself. The range mentioned seems logically achievable, internal targets are slightly more stretched.
So is it logical to believe OCF should rise faster than customer collections, or more in line?
Frankly depends upon the stage of the project and CoC spend. We're a portfolio of about 100-odd projects. If we see great construction progress in projects in later stage, OCF conversion is very high. If we don't do that well but do mid-stage well, opposite happens. I wouldn't put my neck out and convert it. But directionally, OCF will continue to grow very strongly because many projects last year reached slab cycle level. Now we've hit second, third, fourth slabs - typical cash flow accretive stage. All projects equally important to speed construction. Trajectory-wise stronger than last year.
On INR480 billion launch guidance - what's the approval cost budget for full year FY27?
Very difficult, Rahul. Several projects will have different approval requirements - some premium to bid, some FSI to buy. Why don't we connect offline and maybe help with some numbers.
On Ashok Vihar - you said it's likely to launch in FY27. Are all the issues specific to that project or the market behind us? What's the current status?
No, I wouldn't say they're all behind us. And I wouldn't say there's a certainty of it getting launched this year, but very strong progress is being made and the team on the ground feels that this year we will be able to launch it. I don't think that was the message from them at this time last year. I would not say this is something we should take as certain but we're reasonably optimistic. It will be quite positive if within a 12-month period these 3 significant projects that have been delayed - Worli, Bandra and Ashok Vihar - all get launched. In some ways the delays have helped given how the market has moved, but we wouldn't like to see any further delays now.
Pre-sales guidance for FY27 looks strong. Can you give some color on the geographic mix of growth and end-market demand, especially since NCR de-grew in FY26 and there are AI-related demand concerns for Bangalore and Pune?
The idea is to maintain strong diversification. NCR's dip last year was not market-driven but due to a couple of launches slipping out of the year - a large Gurgaon acquisition is now Q1 FY27 launch, and Ashok Vihar should also launch this year. We expect NCR to get back to above INR10,000 crores in sales like the two preceding years. Mumbai and Bangalore have seen outstanding growth and we look to continue. The worry that AI will hurt core residential demand is probably overdone - office demand remains very strong, and any IT softness has been made up by global capability center demand. We're confident of demand in Mumbai, Pune, Hyderabad. We've been indicating the company will seek to grow at 20% per year with guidance growing by that amount each year. Business development last year grew by 59%, so the launch calendar will be even stronger this year. Available inventory to sale has grown 35% YoY due to last year's launches. But there are also uncertainties - AI and the global geopolitical situation - which we'll watch.
Comparing Q4 versus Q1, given the global uncertainty, any color on footfalls and conversions, particularly in premium/luxury housing? Are buyers elongating decision-making cycles such that H1 will be muted but H2 will recover?
Right now H1 looks quite bright because we have a pretty strong launch calendar skewed especially towards H1. In April, we've not seen something really out of the world - sustenance projects are seeing reasonable footfalls. There's a sense of cautiousness in consumers but we are seeing conversions. Launches start hitting more towards May end and June is when we'll fully appreciate the geopolitical risk impact. As an early indication, Godrej Aveline in Bangalore did INR1,500 crores at launch and we've done about INR250 crores in April - by run rate, much better than we've seen in Bangalore. Cautiously optimistic for Q1 and a bit more sure on H1. H2 will continue to be good.
Out of total FY26 pre-sales, what was the split between sustenance sales and new launches?
Quarter 4 was largely a sustenance-driven quarter - close to 50%-odd in Q4 - driven by big projects like Worli (over INR1,000 crores), Panipat (INR200-plus crores), Reserve (INR500 crores). We've created a pan-India sustenance campaign. The 1% per month payment plan is designed as 20% upfront with bullet payments every year - it's closer to CLP somewhere in between. For FY26 total, 60% would be launches and 40% would be sustenance.
Can you give color on the project mix - whether you're inclined more towards mid-premium or mid-income - and the volume vs value growth assumption in FY27 presales guidance?
It's fairly decipherable from each BD deal we announce - expected booking value and area give a pretty exact picture of pricing. Over the last 2 years, we've certainly tried to go into a slightly more premium category, focused on best location within each micro market. Important Q4 additions included a Golf Course Extension Road project in Gurgaon and a prime project in Thane. On volume - over the last 5 years volume has compounded at 20% per year against total sales growth of nearly 40%. I'd expect a roughly equal split between volume and value for the overall growth.
On the impact of Iran war - any impact on demand side, especially NRI customer inquiries, particularly in NCR? Any silver lining like Indian buyers shifting from Dubai/Abu Dhabi back to India? And impact on cost side - procurement delays or cost?
On demand impact - around March last 2 weeks we saw some impact but that was the peak of chaos. We could have probably done INR1,000-odd crores more and would have loved to deliver 20% growth last year - that was an internal target. Right now the situation is a little uncertain from a buyer standpoint but not as worse off as in March - people normalize a situation. Relative to peak stress of March end, it's slightly better. On the silver lining - short-term it does create some dissonance but long-term impacts the market positively because a lot of fence-sitters looking at Dubai as a huge investment hub will revisit. I don't see big impact in next 3-6 months but a lot of demand could flow back to Indian markets. On cost impact - we've done some estimation. Cost impact would be between 5% to 6% at max. Margin impact would be 0.1% to 0.2% per quarter - quite manageable with a small price hike. We have good forward contracts on input materials. We hope the Middle East situation resolves in next 2-3 months.
On the imputed margin - FY26 imputed EBIT margin is about 24.5%, lower than past couple of years. Is it a function of product mix or increased costs/overheads?
In a pretty tight band there will always be a little fluctuation. One factor versus FY25 - we had a big contribution from one of our JV projects in Bangalore in FY26 where we saw almost INR4,000 crores sales in a 50-50 JV. So total economic interest for the full year was 88% versus 93% in the previous year. These minor fluctuations can happen. We had guided for 10% to 15% PAT margin overall and we're happy that for the third consecutive year we're at the very top end of that range.
On the 1% payment program - is it merely a marketing tool to get more sales? How is the payment from a developer/buyer standpoint different vs a regular construction-linked plan? More downside risk or just optionality?
This is not the Dubai-style 1% payment plan. Even last year we did a 1% - it's more like a sourcing tool. Project to project it could differ. For a near-possession project you pay upfront 10-20-30%, rest in 2-3 months, then 1% for 2-3-6 months, then pay on possession. For early-stage projects you pay 20-30% in initial period then 1% per month converging closer to CLP. It is slightly better than CLP but benchmarked to CLP. Where CLP gets 70% of collections, here it could be 60-70% depending on project. For consumers, easier entry point. It attracts consumers to walk into site, then they may choose CLP, this scheme, or down-payment plan. You don't have headache of bulky payments - 20% upfront then 1% per year with some bullet payments. Like a BMW or Mercedes lease scheme. Win-win for consumers and sales.
Did the 1% scheme have a consideration when you built the 20% FY27 collections guidance, or would you have been comfortable even without this scheme?
Collections is going to come agnostic to a particular scheme. These are pillars to our overall portfolio plan. Every quarter we do something to attract consumers to have better walk-ins. Sometimes the scheme is more financial, sometimes more product-based with freebies. From a cash flow planning point of view all projects are benchmarked to a base construction-linked payment plan. As a rule of thumb we don't do more than 5%-7% true position-linked plans in a quarter. Everything else is either CLP or maybe a 10-15% slab-shifted variation. That's enough to keep site momentum going for sustenance engine. Every consumer wants to feel they got the best deal that quarter.
Of the INR42,000 crores GDV announced in FY26, what's the total land and related capex payments? How much is done and how much pending?
We have paid the major payments. Only some milestone-linked payments are pending - around INR1,500 crores is what is pending for the deals signed in FY26 - to be paid in FY27.
On free cash flow - we've announced a dividend payout for next year. What does it indicate? Does it indicate this is regular and we're in a better position to generate FCF and pay regular dividends?
That is the underlying message. Over the last few years we felt the real opportunity was disproportionate growth - 20% would have underplayed the opportunity when the market was growing at that rate. We wanted to grow well ahead of market, grow market share. We made timely investments before and during early parts of the cycle that helped reset the scale of the company to 4x-5x where it was. With that behind us, on this higher base, 20% is the appropriate growth rate in a more steady part of the cycle. The level of investment needed for 20% growth is lower than 40-50% growth. We will see more consistent BD investment while sales, collections and OCF grow sharply over next few years. The surplus cash available for dividend will increase. We've started with a relatively modest dividend for this year, but we'll now look to make these dividends consistent and consistently growing.
Guidance growth is 15% (vs 12.5% last year) - what's expected to be better this year - demand scenario or pipeline visibility?
I'd actually ask you if you have a funny way of looking at results. A couple of years ago we said we would like to grow guidance 20% per year - we've done that both of the last 2 years. This year's guidance only looks better because we probably missed INR1,000 crores at end of March. If we'd done that, last year's growth would have been 20%, and you'd be complaining guidance was only 10% higher. We don't want to constrain ourselves on upside - if we see opportunity to grow 55% as in FY23 or 84% in FY24 we'd like to seize it. This idea of 20% guidance growth is what we're keen to deliver. BD last year grew 59% which implies a stronger launch opportunity this year. Existing inventory available for sale is 35% higher on opening basis. There are additional risks - global situation - which we'll keep watchful eye on. In the last 4 years we've met sales guidance each year and hopeful again.
On pricing - how is price acceptance from consumers when taking increases on sustenance? What's the outlook for FY27?
Pricing has been reasonably decent in South and Bombay. West has been marginally better, nothing great. On the Gurgaon side, I don't see good price uptick - and frankly we're not really looking at that, we focus more on quality of sale. Noida has been a consistent surprise - very strong lack of supply in that market gives a clear demand-supply issue, so price uptake is still good.
On launch guidance of INR480 billion - you've detailed big launches in NCR, can you talk about more projects in other areas and timing?
Pretty action-packed. NCR: very exciting launch in Greater Noida (Godrej Golf Links, last residential cluster); a phase/tower activation in Godrej Arden (Q3); a phase of Miraya later in year. Bombay: Bandra (most awaited launch); phase activations in Kharghar and Panvel; a tower of Worli around Diwali; a very exciting Vikhroli land parcel (Q2/Q3); tower activation of Godrej Reserve; Thane INR7,500 crores acquisition launch in late Q3 or Q4. South: Kukatpally, Kada Agrahara, Bannerghatta, second phase of Regal Pavilion, plotted in Coimbatore, Neopolis in Hyderabad, phase activations in MSR and Whitefield. Pune: Mundhwa Nagpur, another parcel in Upper Kharadi, 2-3 in Mahalunge depending on approvals. Calcutta and Raipur. After long time, Vastrapur (Ahmedabad). We tend to keep buffers - some may slip - but very confident.
On collections - you guided for INR210 billion for FY26, landed at INR200 billion. Is the INR240 billion FY27 guidance baking in slippages or is there upside risk?
A lot of deliveries ended up skewed towards even later in Q4 than planned. There's a little slippage because of that. We're disappointed to have missed the INR21,000 crores guidance. INR24,000 crores - we always would have some buffers. So I wouldn't say INR24,000 crores is everything going right - we could have perhaps gone a little higher, but based on this year's learning where we missed by 5%, we wanted to stick with INR24,000 crores but hope to do a bit better.
Launch performance for Kharghar and Kharadi projects in Q4FY26 was slightly soft - thoughts? And for Gurgaon projects like Sora and Miraya we did 30%-35% at launch but I don't see that offtake continuing - your thoughts?
Kharghar and Upper Kharadi are exactly part of the bucket of projects which saw impact of lower conversion in last 2 weekends of March due to Middle East - short-term issue. We had great check pickup but conversions didn't hold because consumers expected extraordinary deals which we don't offer. On the 2 golf course projects - stage of construction matters. In one project we've removed the marketing office so construction can complete - there's a basement and logistics part. Typically 3-4 months once that stage is over we put back a temporary marketing office and sales figure will start moving up.
On the cash side - we have cash of about INR8,000 crores in books. How much would be in the RERA account?
Around INR6,700 crores.
On revenue recognition - we're still recognizing revenues in line with FY21-FY22 sales while sales ramped up from FY23. Going into FY27 and especially FY28, could we see a bump in revenue recognition given the delivery guidance?
We'd see that major bump up in FY28. The OCs will come in - significant P&L revenue recognition then. Even now it's quite healthy - INR2,900 crores is revenue linked to all these OCs. Even this year it should be decent. But the real bump is FY28 when our target is to hit 20% growing. FY28 is the year we said we'll be hitting 20% ROE - that's the year of significant bump-up. With delivery guidance current year higher than last year we should see positive momentum this year as well, but big step jump in FY28. All those revenues to be recognized will be off our own projects. GPL's economic interest has grown faster than bookings - compounding at 55% per year over 5 years. Market perhaps hasn't fully appreciated that yet.