Godrej Properties shares drop 2% after 'Reduce' call from Nomura

The shares of Godrej Properties dropped nearly 2 percent on July 9 after Nomura initiated a 'Reduce' rating on the stock. The shares of the company were trading at Rs 2,272 apiece in the morning.

Nomura initiated a 'Reduce' rating on the shares of the real estate major, with a target price of Rs 1,900 apiece. This implies a downside potential of nearly 18 percent from the stock's previous closing price of Rs 2,310 apiece.

The global brokerage said that the company's pre-sales momentum was likely to be weaker than expectations. The stock's valuation looks stretched, it added. The brokerage expects the company to report pre-sales volume for FY26 at Rs 31,000 crore, lower than its guidance of Rs 32,500 crore.

Volume-driven strategy poses risk of further equity dilution and execution challenges, which are visible, Nomura further said in its note.

Godrej Properties shares have tumbled nearly 8 percent in the past one month, and around 9 percent in the past six months. The stock is down over 18 percent so far in 2025. While the stock declined over 30 percent in the past one year, it gained nearly 155 percent in the past five years.

The stock currently has a P/E ratio of over 47. Its market capitalization stands at Rs 68,449 crore.

Earlier in May, the real estate company had reported a 19 percent year-on-year fall in net profit to Rs 382 crore for the fourth quarter of the financial year 2024-2025. It had earlier reported a net profit of Rs 471 crore in Q4 FY24.

Although the company reported a fall in net profit on an yearly basis, it rose by a whopping 135 percent from the Rs 163 crore net profit reported in the previous quarter (Q3 FY25). The real estate major's revenue from operations strongly surged on both terms, rising 49 percent from Q4 FY24 and 119 percent from Q3 FY25 to Rs 2,122 crore during the quarter under review. Godrej Properties also reported an EBITDA of Rs 634 crore for Q4 FY25, marking a 2 percent fall from the Rs 649 crore EBITDA reported in Q4 FY24.

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