Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil A1+’ rating on the commercial paper (CP) programme of Godrej Properties Ltd (GPL).

 

The rating continues to reflect the strong market position of GPL, backed by an established brand, strong execution record, healthy saleability and robust financial flexibility on account of being a part of the Godrej group. The rating is also supported by GPL’s adequate financial risk profile. These strengths are partially offset by exposure to refinancing risk and susceptibility to cyclicality inherent in the real estate sector.

 

The company achieved remarkable sales performance in fiscal 2025, with total sales area of 25.73 million square feet (mn sq ft) valued at Rs 29,444 crore. This was driven by strong demand for its projects and a series of successful launches throughout the year. The company's delivery pipeline grew significantly, with a record 18.4 mn sq ft (including 4.3 mn sq ft of commercial assets) delivered across five cities, representing increase of 47% on-year.

 

Looking ahead, GPL is poised to sustain its sales momentum, with plans to launch new projects over the medium term. Supported by robust end-user demand, the company expects to achieve booking value of over Rs 32,500 crore, with deliveries spanning 9-11 mn sq ft in the next fiscal. As on March 31, 2025, the company's saleable area stood at approximately 229 mn sq ft, providing a significant pipeline for future growth.

 

With a healthy launch pipeline of around Rs 40,000 crore planned for fiscal 2026 and planned liquidation of its existing unsold inventory worth approximately Rs 21,000 crore, the company is poised for further upside in cash flows. This will support the construction costs of ongoing projects over the medium term. Additionally, timely progress in construction has resulted in 49% increase in collections to Rs 18,877 crore. The company's focus on key markets such as Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, as well as its expanding presence in Hyderabad, Ahmedabad, Indore, Kolkata, Chandigarh, Nagpur and Chennai, will also contribute to its growth trajectory.

 

GPL's financial risk profile is expected to remain strong over the medium term, driven by its focus on healthy operating performance. As on March 31, 2025, the company's gross debt was approximately Rs 12,500 crore, with a stable debt structure and short-term debt accounting for approximately 65-70% of total debt. The company's debt metrics are expected to remain robust, with gross debt to operating cash flow (Crisil Ratings adjusted) ratio below 2 times and operating cash flow to interest coverage ratio (Crisil Ratings adjusted) above 5 times. While debt may increase to support new project development, the debt-to-CFO ratio is expected to improve as new assets are created. Any significant debt-funded acquisitions will remain monitorable.

 

GPL's liquidity position is robust, with cash and bank balance of approximately Rs 9,130 crore as on March 31, 2025, including approximately Rs 4,272 crore of unencumbered cash. The company also has access to approximately Rs 4,500 crore in undrawn working capital facilities. To fund its investments, GPL will use operational cash flow and available qualified institutional placement (QIP) proceeds, ensuring stable debt and liquidity levels. The ability of GPL to maintain operational performance and keep debt and leverage metrics at adequate levels will be monitorable.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of GPL and its subsidiaries, joint ventures (JVs) and associates (based on the consolidated financials of GPL group). This is because these entities, collectively referred to as GPL group, have common promoters and are in the same business.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths:

• Established brand name and strong market position: GPL, operating in 11 cities, delivered around 66 mn sq ft of projects during the eight fiscals through 2025, supported by strong execution capability as reflected in quality construction and delivery track record. The company had more than 100 mn sq ft (corresponding to GPL’s share in launched projects and excluding projects under the developer management agreement [DMA] model; as per estimates by Crisil Ratings) of ongoing residential projects as on March 31, 2025. Average saleability was around 84% (Crisil Ratings estimates) in ongoing residential projects as on March 31, 2025. Strong brand and execution track record continues to help GPL to achieve healthy pre-sales at the project launch itself. GPL is expected to sustain its strong business risk profile over the medium term, backed by robust saleability in ongoing projects and increasing share of owned projects and JV/joint development agreement (JDA) models with higher revenue/profit share, thereby enhancing overall profitability.
   
• Strong parentage enhances financial flexibility: The promoter family and group companies held 46.67% in GPL as on March 31, 2025. GPL derives significant synergies from its association with the Godrej brand, as reflected by the robust saleability of its projects, all of which share the group’s brand name. The company has signed a memorandum of understanding (MoU) with Godrej Enterprise Group entities to develop land parcels under the DMA model, which provides additional long-term business visibility. Furthermore, GPL has the financial flexibility to refinance debt at low cost since it is a part of the Godrej Industries Group, which has been demonstrated in the past. Crisil Ratings believes strong management and association with the Godrej Industries Group will remain key rating drivers.
   
• Adequate financial risk profile: The financial risk profile is characterised by high visibility of operating cash inflow over the medium term, given the total potential saleable area of 229 mn sq ft across major micro markets in the country. Leverage indicators have improved around March 2025, with the inflow from the QIP of Rs 6,000 crore, which has been deployed towards acquisition of projects through outright land acquisition. Net debt is expected to increase further to support increased outflow towards business development and construction expenses for new projects, resulting in higher net gearing of up to 1 time. Although leverage is likely to increase with deployment of funds and the subsequent asset creation, the debt to cash flow from operations (CFO) ratio is likely to improve to below 2 times over the medium term (Crisil Ratings estimates).

 

Weaknesses:

• Exposure to refinancing risk: The proportion of short-term debt to total borrowing remained high for GPL at 65-70% in recent years. While it has helped in maintaining average cost of borrowings at below 7.80% (7.82% as on March 31, 2024), the average maturity profile of debt remains short, leading to large repayments in the near term, necessitating constant refinancing or roll-overs. Majority of the short-term facilities are in the form of Non-Convertible Debenture (NCD), commercial paper (CP) and cash credit/overdraft facilities which are revolving in nature.  Nevertheless, the risk is mitigated by healthy cash surplus of ~Rs 9,130 crore, unutilised bank lines (including unutilised CP limits) of ~Rs 4,500 crore as on March 31, 2025, and strong saleability and expected collections from ongoing projects. GPL has the financial flexibility to refinance debt at low cost which has been demonstrated in the past.
   
• Exposure to inherent cyclicality: Cyclicality in the real estate sector could result in fluctuations in cash inflow and volatility in sales. In contrast, cash outflow, such as for debt servicing, is relatively fixed. Any decline in demand for ongoing projects could result in lower collections and impact cash flow.

Liquidity: Strong

Liquidity is supported by strong saleability and collections in ongoing projects as well as those expected for new launches. Crisil Ratings believes operating cash inflow may improve to over Rs 21,000 crore over the medium term. Majority of GPL’s debt is short term in nature, thereby resulting in large repayments in the near term. The Godrej Industries Group has adequate financial flexibility to manage the debt repayment and has demonstrated refinancing of debt at low cost in the past. GPL has 229 mn sq ft of saleable area across major micro markets in the country. Furthermore, undrawn bank lines (including unutilised CP limit) of around ~Rs 4,500 crore and cash and equivalent of ~Rs 9,130 crore, as on March 31, 2025, support liquidity.

 

Environment, social and governance (ESG) profile

Crisil Ratings believes GPL’s ESG profile supports its already strong credit risk profile.

 

The real estate sector has a significant impact on the environment owing to high emissions, waste generation and impact on land and biodiversity. The impact on social factors consists of labour-intensive operations and safety issues on account of construction-related activities.

 

GPL has an ongoing focus on strengthening the various aspects of its ESG profile.

 

Key ESG highlights:

• GPL has committed to reduce scope 1 and 2 greenhouse gas (GHG) emissions by 72.6% by fiscal 2035 compared to its fiscal 2021 base of 11. 58 kg CO2E per square feet, with this target approved by the Science-Based Targets initiative (SBTi). Against this target, GPL’s GHG emissions stood at 8.7 kg CO2E per square feet which is 25% lower than its fiscal 2021 base.
• Furthermore, it has also committed to ensuring that at least 88.5% of its supplier base include those with SBTi approved targets on emissions by fiscal 2026.
• The company has reported that 98% of the waste generated is being recycled/reused at its construction sites.
• Through corporate social responsibility (CSR) endeavours, GPL has led groundwater recharge effort in three villages, covering a combined area of 3,300 hectares. As per its estimates, annual groundwater recharge of 7,656 million litres was achieved in these areas in fiscal 2024.
• Furthermore, it planted 47,897 trees which includes 36,700 trees through CSR and 11,197 across all operational regions in fiscal 2024, as part of its commitment to biodiversity and ecosystem conservation.
• The company has reported loss time injury frequency rate (LTIFR) of 0.03, which was lower than its listed peers.
• GPL reported gender diversity of 30.84% for permanent employees, nil sexual harassment complaints and attrition rate of 25% in fiscal 2024.
• Its governance profile is characterised by 57% of the board comprising independent directors, 29% woman board directors, presence of a board level ESG committee, split in chairman and CEO positions and extensive financial disclosures.

Rating sensitivity factors

Downward factors:

• Sharp decline in the operating cash flow, triggered by slackened saleability of ongoing and proposed projects or delays in project execution
• Weakening of the financial risk profile, driven by lower cash flow or higher capex leading to debt to CFO ratio above 2 times on sustained basis

About the Company

GPL is the real estate arm of the Godrej Industries Group and was incorporated as Sea Breeze Constructions and Investments Pvt Ltd on February 8, 1985, by Mr Mohan Khubchand Thakur and Ms Desiree Mohan Thakur. In 1987, it became a part of the Godrej group and in 1989, it became a subsidiary of Godrej Industries Ltd (‘Crisil AA+/Stable/Crisil A1+’), which holds 44.77% of the company’s equity shares as on March 31, 2025. The promoters and promoter group collectively held 46.67% stake in GPL. The company currently operates in 11 cities and focuses on residential, commercial and township development.

Any other information: Not applicable

Annexure – List of Entities Consolidated

Entities consolidated*	Extent of consolidation**	Rationale for consolidation
Godrej Projects Development Limited	Full	Wholly owned subsidiary
Godrej Garden City Properties Private Limited	Full	Wholly owned subsidiary
Godrej Hillside Properties Private Limited	Full	Wholly owned subsidiary
Godrej Home Developers Private Limited	Full	Wholly owned subsidiary
Godrej Prakriti Facilities Private Limited	Full	Wholly owned subsidiary
Prakritiplaza Facilities Management Private Limited	Full	Wholly owned subsidiary
Godrej Highrises Properties Private Limited	Full	Wholly owned subsidiary
Godrej Genesis Facilities Management Private Limited	Full	Wholly owned subsidiary
Citystar Infraprojects Limited	Full	Wholly owned subsidiary
Godrej Residency Private Limited	Full	Wholly owned subsidiary
Godrej Green Woods Private Limited	Full	Wholly owned subsidiary
Godrej Realty Private Limited	Full	Wholly owned subsidiary
Godrej Living Private Limited	Full	Wholly owned subsidiary
Ashank Land and Building Private Limited	Full	Wholly owned subsidiary
Godrej Township Development Limited (Formerly known as Godrej Home Constructions Private Limited)	Full	Wholly owned subsidiary
Wonder City Buildcon Private Limited	Full	Wholly owned subsidiary
Godrej Skyline Developers Limited	Full	Wholly owned subsidiary (w.e.f September 28, 2023)
Godrej Real Estate Distribution Company Private Limited	Full	Wholly owned subsidiary (w.e.f July 20, 2023)
Pearlshine Home Developers Private Limited	Full	Wholly owned subsidiary
Godrej Highview LLP	Full	Wholly owned subsidiary (w.e.f  March 31, 2025)
Godrej SSPDL Green Acres LLP	Full	Wholly owned subsidiary (w.e.f  March 28, 2025)
Maan-Hinje Township Developers Private Limited (Formerly known as Maan-Hinje Township Developers LLP)	Full	Wholly owned subsidiary
Godrej Highrises Realty LLP	Full	Wholly owned subsidiary
Godrej Project Developers & Properties LLP	Full	Wholly owned subsidiary
Godrej Skyview LLP	Full	Wholly owned subsidiary
Godrej Green Properties LLP	Full	Wholly owned subsidiary
Godrej Projects (Soma) LLP	Full	Wholly owned subsidiary
Godrej Athenmark LLP	Full	Wholly owned subsidiary
Godrej City Facilities Management LLP	Full	Wholly owned subsidiary
Godrej Florentine LLP	Full	Wholly owned subsidiary
Godrej Olympia LLP	Full	Wholly owned subsidiary
Godrej Buildwell Projects LLP	Full	Wholly owned subsidiary
Oasis Landmarks LLP	Full	Wholly owned subsidiary
Ashank Facility Management LLP	Full	Wholly owned subsidiary
Godrej Reserve LLP	Full	Wholly owned subsidiary
Ashank Projects Development LLP (formerly known as Ashank Realty Management LLP)	Full	Wholly owned subsidiary
Dream World Landmarks LLP	Full	Wholly owned subsidiary (w.e.f September 30, 2023)
Caroa Properties LLP	Full	Wholly owned subsidiary (w.e.f Mar 28, 2024)
Godrej Vestamark LLP	Full	Wholly owned subsidiary (w.e.f June 23, 2023)
Godrej Redevelopers (Mumbai) Private Limited	Partial	Joint Venture
Godrej Greenview Housing Private Limited	Partial	Joint Venture
Wonder Projects Development Private Limited	Partial	Joint Venture
Godrej Real View Developers Private Limited	Partial	Joint Venture
Pearlite Real Properties Private Limited	Partial	Joint Venture
Godrej Green Homes Private Limited	Partial	Joint Venture
Madhuvan Enterprises Private Limited	Partial	Joint Venture
Godrej Macbricks Private Limited	Partial	Joint Venture
Munjal Hospitality Private Limited	Partial	Joint Venture
Yujya Developers Private Limited	Partial	Joint Venture
Vivrut Developers Private Limited	Partial	Joint Venture
Yerwada Developers Private Limited	Partial	Joint Venture
Vagishwari Land Developers Private Limited	Partial	Joint Venture
Mosaic Landmarks LLP	Partial	Joint Venture
Dream World Landmarks LLP	Partial	Joint Venture (Classified as Joint Venture upto September 29, 2023)
Oxford Realty LLP	Partial	Joint Venture
Godrej SSPDL Green Acres LLP	Partial	Joint Venture (Classified as Joint Venture upto March 27, 2025)
M S Ramaiah Ventures LLP	Partial	Joint Venture
Godrej Housing Projects LLP	Partial	Joint Venture
Godrej Amitis Developers LLP	Partial	Joint Venture
AR Landcraft LLP	Partial	Joint Venture
Prakhhyat Dwellings LLP	Partial	Joint Venture
Godrej Highview LLP	Partial	Joint Venture (Classified as Joint Venture upto March 30, 2025)
Godrej Irismark LLP	Partial	Joint Venture
Godrej Projects North Star LLP	Partial	Joint Venture
Godrej Developers & Properties LLP	Partial	Joint Venture
Roseberry Estate LLP	Partial	Joint Venture
Suncity Infrastructures (Mumbai) LLP	Partial	Joint Venture
Mahalunge Township Developers LLP	Partial	Joint Venture
Manyata Industrial Parks LLP	Partial	Joint Venture
Godrej Odyssey LLP	Partial	Joint Venture
Universal Metro Properties LLP	Partial	Joint Venture
Embellish Houses LLP	Partial	Joint Venture
Manjari Housing Projects LLP	Partial	Joint Venture
Godrej Projects North LLP	Partial	Joint Venture
Godrej Projects Development Limited	Full	Wholly owned subsidiary

*Details as on March 31, 2025

**Partial implies moderate consolidation using equity method of consolidation