Godrej Propert. (GODREJPROP)
CyclicalFairStock Score: 18/100 — RISKY
Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,990 |
| Market Cap | ₹59,944.08 Cr |
| P/E Ratio | 37.46 |
| ROCE | 6.57% |
| ROE | 9.14% |
| Dividend Yield | 0.5% |
| Profit Growth | 7.9% |
| Debt/Equity | 0.82 |
| Sales Growth | -79.03% |
| Free Cash Flow | ₹-6,515 Cr |
| Promoter Holding | 47.17% |
| 52-Week Range | ₹1,434 — ₹2,352 |
| Sector | Realty |
| Book Value | ₹635.96 |
Strengths
- Strong Godrej brand and promoter holding of 47.17% align long-term interests.
- 5-year revenue CAGR of 45.12% demonstrates past execution capability.
- Positive latest-quarter net profit of ₹194 Cr on ₹498 Cr sales shows margin potential.
- Book value of ₹574.77 provides some asset backing, though price is far above it.
Concerns
- Negative free cash flow of ₹-6,515 Cr and Altman Z-Score of 0.88 signal financial stress.
- Sales declined 10.22% while P/E of 32.62 and P/B of 3.12 remain expensive.
- No dividend yield; margin of safety is deeply negative versus Graham Number of ₹853.89.
- Low ROCE of 6.57% and ROE of 9.14% are poor relative to the premium valuation.
AI Analysis
At ₹1,792, Godrej Properties trades at 32.62 times earnings and 3.12 times book, yet I see a business with declining sales and burning cash. The latest quarter showed ₹498 crore in sales and ₹194 crore in profit, but that hasn't translated into free cash flow – in fact, it's negative ₹6,515 crore. That is a red flag. Graham taught me that price is what you pay, value is what you get. Here, the Graham Number is only ₹853.89, implying we're paying more than double a conservative estimate of worth. The Altman Z-Score of 0.88 suggests financial stress, and with debt/equity at 0.89, the balance sheet isn't sturdy. ROE of 9.14% and ROCE of 6.57% are mediocre for such a premium valuation. The 5-year revenue CAGR of 45.12% shows the company could deliver in an upturn, but recent sales fell 10.22%. Real estate is inherently cyclical, and past growth shouldn't be extrapolated. There is no dividend to compensate while waiting. Promoter holding of 47.17% does align interests, but that alone doesn't justify the price. I demand a margin of safety. Here, I see none. This is a well-known brand, but the risk-reward is skewed against us. I would need a significantly lower price, closer to the Graham Number, or proof of stabilised cash flows before considering it.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer