Godrej Properties Financial Analysis Sample | Finance Assignment Help
This MBA financial analysis sample evaluates Godrej Properties using its consolidated FY 2023-24 statements. It covers the Indian real estate industry, Porter's Five Forces, accounting policies and earnings quality, a common-size income statement and balance sheet, six ratios benchmarked against DLF, and a DuPont breakdown of return on equity.
This is a full financial analysis sample on Godrej Properties, one of India's largest listed real estate developers. It was written for a postgraduate Financial Accounting module and works from the company's consolidated FY 2023-24 statements (year ended 31 March 2024) in its Integrated Report 2023-24, compared with FY 2022-23. All three annexures are the consolidated statements, so every ratio in the report can be traced to a printed line. The frameworks used are Porter's Five Forces, an earnings-quality review of the accounting policies, common-size income statement and balance sheet analysis, six ratios benchmarked against DLF, and DuPont analysis of return on equity.
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Report: Godrej Properties Financial Analysis and Health Evaluation
Submitted in partial fulfillment for completion of the course, Financial Accounting.
Industry Overview
Godrej Properties operates in the Indian real estate industry, which covers residential, commercial, office and retail property and is one of the largest sectors of the economy. The India Brand Equity Foundation values the market at US$650 billion in 2025 and projects US$5.80 trillion by 2047 (IBEF, 2026). The sector is the second-largest employment generator in the country after agriculture.
Demand has been driven by a growing middle class, rapid urbanization and the push for affordable housing. The market is fragmented, with many regional developers alongside a handful of national ones. Godrej Properties, DLF, Prestige Estates Projects, Oberoi Realty and Sobha are the listed leaders.
Key Characteristics and Trends
- Growth in Office Real Estate - Many sectors, including IT, manufacturing, e-commerce, BFSI and engineering are increasingly leasing office spaces, showing consistently high absorption rates. Real Estate Regulation & Development Act (RERA) and Real Estate Investment Trusts (REITs) have led to an increase in commercial real estate investments as well. International PE investors and Indian HNIs find investing in office properties attractive because of the rental yields.
- Growth in Demand for Affordable Housing - As estimated by the India Brand Equity Foundation, there is a shortage of about ten million housing units in Indian cities, which will only increase given the rising urban population. This shortage is leading to a push towards demand for affordable housing. Government initiatives like the Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects (SWAMIH) and Pradhan Mantri Awas Yojana (PMAY) are aligned with this demand.
- Digital Transformation - The industry has started moving towards digital technologies like AR/VR, online sales platforms and AI/ML, which streamline the sales process and increase reach.
- Growth in Demand for Sustainability - Buyers are increasingly conscious of eco-friendliness and sustainability. This is leading developers in India to adopt construction practices focused on sustainable solutions.
Porter's Five Forces Analysis for Godrej Properties
Porter's Five Forces: Indian real estate
Competitive rivalry
Strength 4 of 5
- DLF, Oberoi Realty and Sobha compete nationally
- A fragmented market with many regional players
Threat of new entrants
Strength 2 of 5
- Heavy capital investment required
- Strict regulation raises the barrier
Bargaining power of suppliers
Strength 3 of 5
- Cement, steel, labor and construction technology
- Property costs depend heavily on these inputs
Bargaining power of buyers
Strength 3 of 5
- Residential and corporate buyers
- Demand growing in Bengaluru, Mumbai and Gurugram
Threat of substitutes
Strength 3 of 5
- Renting or leasing instead of buying
- Customers - Customers range from residential buyers to corporate buyers. There is increasing growth in customers in the tier 1 cities like Bengaluru, Mumbai and Gurugram where Godrej Properties has an established presence.
- Competitors - Major competitors of Godrej Properties include both national and regional companies: DLF Ltd., Oberoi Realty and Sobha Ltd.
- New Entrants - The requirement for heavy capital investment and strict regulations make the barrier to new entrants in the Indian real estate industry high.
- Substitutes - Renting or leasing is a common substitute for real estate purchase.
- Suppliers - The supply chain is made up of construction raw materials such as cement and steel, labor, and construction technology service providers. Property costs depend significantly on what these inputs cost.
Company Strategy
Godrej Properties has adopted a strategic approach that balances growth, sustainability and innovation. The company focuses on the following pillars:
Expansion Plans
- Geographical Diversification: The company is expanding its footprint across India, with a major focus on Mumbai, Bengaluru, Delhi/NCR and Pune. The expansion is driven by both organic growth and land acquisitions, in the premium and affordable housing segments.
- Pipeline of Projects: At 31 March 2024 the company had 102 ongoing and forthcoming projects with a combined developable area of 223 million square feet (Integrated Report 2023-24). The balance sheet shows what a pipeline that size costs to carry: inventories of ₹22,564.62 crore, 63.14% of total assets, up from ₹12,073.40 crore a year earlier (Annexure 2).
- Asset-Light Model: The company partners with landowners through Joint Development Agreements (JDAs), which lowers the capital tied up in land per project and supports return on equity.
Sustainability Integration
- Green Certifications: Godrej Properties pursues green building certification for its projects. This reduces environmental impact and supports the brand with environmentally conscious buyers.
- Energy Efficiency & Resource Management: Rainwater harvesting, renewable energy adoption and waste recycling are integrated into projects. Sustainability goals are aligned with the United Nations' Sustainable Development Goals (SDGs), focusing on climate action and resource efficiency.
Innovation & Operational Excellence
- Construction Techniques: The company invests in construction technologies such as precast concrete and modular construction to reduce project timelines and costs.
- Customer-Centric Approach: Godrej Properties focuses on product quality, timely delivery and customer experience through digital platforms and home design.
Accounting Policies and Earnings Quality
Revenue Recognition
Godrej Properties recognizes revenue under Ind AS 115 when control of a unit passes to the customer. Its Integrated Report 2023-24 states that revenue "is recognized upon transfer of control of promised products to customer in an amount that reflects the transaction price", with performance obligations satisfied at a point in time and then over time where the Group has an enforceable right to payment for work completed to date. The auditor's key audit matter is more precise about when that happens: the trigger "is normally completion of the project or receipt of approvals on completion from relevant authorities post which the contract becomes non-cancellable", after which the Group records revenue over time until actual possession, or on possession, as the contract provides.
Impact on Earnings Quality:
- Revenue arrives when projects complete, not as construction progresses. A year in which few projects reach completion shows low revenue however strong sales bookings were, and the cost of everything still under construction accumulates in inventory until then. That is the pattern in FY 2023-24: revenue from operations of ₹3,035.62 crore against inventories of ₹22,564.62 crore, and ₹4,916.35 crore of cash absorbed by inventories in the year (Annexure 3).
- Revenue recorded over time depends on management's estimate of costs to complete, which the auditor names as the significant judgment. That estimate, not the policy, is where a reader of these accounts should look for risk.
Expense Recognition
- Cost Allocation: Land, construction and development costs are carried in inventory and charged to the income statement as the related units are recognized as revenue. Annexure 1 shows the mechanism. Cost of materials consumed was ₹6,787.01 crore, but ₹5,157.03 crore of that was added to construction work-in-progress rather than charged, so the cost of sales set against the year's revenue was ₹1,808.03 crore.
- Interest Capitalization: Borrowing costs attributable to projects under construction are capitalized under Ind AS 23. Note 34 of the report shows total finance costs of ₹1,176.17 crore in FY 2023-24, of which ₹1,024.06 crore was capitalized into construction work in progress and ₹152.11 crore was charged to profit, at capitalization rates of 7.00% to 9.20%. The income statement therefore carries about an eighth of the interest the Group incurred; the rest will reach profit as cost of sales when the projects it funded are recognized.
Depreciation and Amortization
- Property, plant and equipment is depreciated on a straight-line basis over useful lives per Schedule II of the Companies Act, 2013, and intangible assets are amortized over their estimated useful lives. At ₹44.56 crore, 1.47% of revenue, depreciation has little bearing on earnings quality for a developer whose assets are inventory rather than plant.
Impairment of Assets
Assets are tested for impairment under Ind AS 36 when indicators exist, and inventories are carried at the lower of cost and net realizable value. The FY 2023-24 cash flow statement shows a ₹30.71 crore reversal of an earlier inventory write-down, against a ₹10.31 crore write-down in FY 2022-23.
Provisions and Contingencies
- Provisions are recognized under Ind AS 37 when a present obligation from a past event will probably require an outflow of resources. Current provisions were ₹41.85 crore at 31 March 2024.
Earnings Quality Evaluation
The policies are standard for a listed Indian developer. The earnings-quality questions are in the numbers the policies produce, and three stand out in FY 2023-24.
- Other income exceeds profit before tax. Other income was ₹1,298.60 crore against profit before tax of ₹999.99 crore. It includes a ₹497.07 crore fair value gain on acquiring control of a joint venture (Note 44), a non-cash and non-recurring item equal to half of profit before tax, and ₹592.99 crore of interest income. Without the fair value gain, profit before tax would have been ₹502.92 crore, below the ₹795.27 crore of FY 2022-23.
- Operating expenses exceed operating revenue. Total expenses of ₹3,361.97 crore were 110.75% of revenue from operations. The Group was profitable in FY 2023-24 because of other income, not because of the units it recognized.
- Profit did not turn into cash. Net cash used in operating activities was ₹692.57 crore against profit for the year of ₹747.06 crore, and the year before it was ₹2,860.64 crore against ₹620.60 crore. The inventory build of ₹4,916.35 crore absorbed slightly more than the ₹4,822.15 crore that customer advances and other non-financial liabilities brought in, and ₹264.53 crore of tax was paid in cash. Interest paid in cash was ₹868.34 crore against ₹152.11 crore expensed.
None of these is an accounting irregularity; each follows from the point-in-time policy applied to a company in a build-out phase. Together they mean reported profit runs well ahead of cash, which is the standard test of earnings quality in the CFA Institute's introduction to financial statement analysis.
Key Financial Metrics (FY 2023-24, consolidated, ₹ crore)
| Metric | Value | Where it comes from |
| Revenue from operations | 3,035.62 | Annexure 1 |
| Total income (revenue plus other income) | 4,334.22 | Annexure 1 |
| Profit before tax | 999.99 | Annexure 1 |
| Profit for the year, including non-controlling interests (₹725.27 crore attributable to owners of the company) | 747.06 | Annexure 1 |
| Net cash used in operating activities | (692.57) | Annexure 3 |
| Return on equity (profit for the year / total equity) | 7.25% | 747.06 / 10,301.44 |
Income Statement and Balance Sheet Analysis
The common-size statements are in Annexure 1 (income statement, each line as a share of revenue from operations) and Annexure 2 (balance sheet, each line as a share of total assets).
Where Godrej Properties' assets sit, 31 March 2024 (share of total assets)
Chart data
| Item | Value (%) |
|---|---|
| Inventories | 63.14% |
| Other current assets (investments, bank balances, loans, other) | 23.1% |
| Non-current assets | 9.19% |
| Cash and cash equivalents | 3.69% |
| Trade receivables | 0.87% |
Profit against operating cash, FY 2023 and FY 2024 (₹ crore)
| Point of comparison | FY 2023 | FY 2024 |
|---|---|---|
| Profit for the year | FY 2023 620.60 | FY 2024 747.06 |
| Operating profit / (loss) before working capital changes | FY 2023 342.55 | FY 2024 (103.42) |
| Increase in inventories | FY 2023 (3,987.28) | FY 2024 (4,916.35) |
| Increase in non-financial liabilities (customer advances) | FY 2023 993.85 | FY 2024 4,822.15 |
| Direct taxes paid | FY 2023 (168.95) | FY 2024 (264.53) |
| Net cash used in operating activities | FY 2023 (2,860.64) | FY 2024 (692.57) |
Income Statement - Key Takeaways:
- Cost of materials consumed was 223.58% of revenue from operations in FY 2024 (286.55% in FY 2023), but the change-in-inventories credit of 169.88% of revenue moved most of it into construction work-in-progress. The net cost of sales was 59.56% of revenue in FY 2024 against 55.14% in FY 2023, so gross margin fell from 44.86% to 40.44%.
- Other income was 42.78% of revenue from operations in FY 2024 (34.93% in FY 2023) and grew 65.1% in the year, faster than revenue. It carried the fair value gain discussed above.
- Other expenses rose from 24.17% to 33.80% of revenue, an 88.5% increase in absolute terms, and employee benefits from 9.70% to 10.91%. Total expenses were 110.75% of revenue in FY 2024 and 97.81% in FY 2023.
Balance Sheet - Key Insights:
- Inventories are the largest asset, 63.14% of total assets at 31 March 2024, up from 52.25%. The company is carrying an unusually large volume of projects under construction.
- Cash and bank balances were ₹2,920.37 crore (cash and cash equivalents ₹1,319.81 crore plus other bank balances ₹1,600.56 crore), 8.17% of total assets, with a further ₹1,788.25 crore in current investments.
- Total equity fell from 40.19% of total assets to 28.83% as total assets grew 54.7% in a year funded by liabilities, which rose from 59.81% to 71.17% of the balance sheet.
- Borrowings: current borrowings rose from ₹6,411.75 crore to ₹7,996.46 crore but fell as a share of total assets from 27.75% to 22.38%. The company also took ₹2,660.00 crore of non-current borrowings, which it had none of a year earlier. Total borrowings of ₹10,656.46 crore now exceed total equity of ₹10,301.44 crore.
- Customer advances are the other funding source. Other current non-financial liabilities rose from ₹3,096.41 crore to ₹9,930.91 crore (13.40% to 27.79% of total assets); Note 27 shows that ₹8,811.74 crore of the closing figure is advances received against the sale of flats and units, up from ₹2,261.87 crore.
Trend and Growth Analysis:
- Revenue Growth: revenue from operations rose 34.8%, from ₹2,252.26 crore in FY 2023 to ₹3,035.62 crore in FY 2024.
- Inventories grew 86.9%, from ₹12,073.40 crore to ₹22,564.62 crore.
- Profit Before Tax grew 25.7%, from ₹795.27 crore to ₹999.99 crore, and profit for the year 20.4%, from ₹620.60 crore to ₹747.06 crore. Profit rose more slowly than revenue.
- Current Liabilities rose 64.9%, from ₹13,786.16 crore to ₹22,731.94 crore, mainly customer advances and short-term borrowings.
Comparison of Cash Flow from Operations and Net Income:
- Profit for the year was ₹747.06 crore in FY 2024 and ₹620.60 crore in FY 2023 (Annexure 1).
- Operating profit before working capital changes was a loss of ₹103.42 crore in FY 2024 (a profit of ₹342.55 crore in FY 2023). The adjustments take out ₹592.99 crore of interest income, the ₹497.07 crore fair value gain and ₹98.31 crore of profit on sale of investments, and add back ₹152.11 crore of finance costs and ₹44.56 crore of depreciation (Annexure 3).
- Net cash used in operating activities was ₹692.57 crore in FY 2024 and ₹2,860.64 crore in FY 2023. Working capital absorbed ₹324.62 crore in FY 2024: inventories took ₹4,916.35 crore while non-financial liabilities, mostly customer advances, released ₹4,822.15 crore. Direct taxes paid were ₹264.53 crore.
- Cash conversion was therefore negative in both years while profit rose. For a developer with a point-in-time revenue policy this is what a build-out phase looks like: profit is recognized on completed units, and cash goes into the units still under construction. The financing statement confirms the funding: net cash from financing activities was ₹3,257.95 crore in FY 2024.
Analysis of Major Line Items and Their Movements:
- Inventory: the 86.9% increase is the single largest movement on the balance sheet, reflecting the project pipeline and ₹4,916.35 crore of cash spent on it in the year.
- Borrowings: the Group raised ₹2,660.00 crore of long-term borrowings and repaid ₹1,000.00 crore, and short-term borrowings rose by a net ₹2,476.40 crore (Annexure 3), taking total borrowings from ₹6,411.75 crore to ₹10,656.46 crore.
- Trade Receivables (current) fell from ₹359.38 crore to ₹309.60 crore, a small line for a company that collects advances before handing over units.
What Do Godrej Properties' Financial Ratios Show?
On FY 2023-24 consolidated figures, Godrej Properties is profitable but less efficient and more indebted than DLF. Gross margin is 40.44% against DLF's 56.53%, return on assets 2.09% against 4.52%, quick ratio 0.43 against 0.77, and debt to equity 1.03 against 0.12. Against its own FY 2022-23 numbers every ratio except return on equity moved the wrong way, and return on equity rose only because the equity multiplier rose. A marker checks one ratio against the annexure before reading the rest, so every input below is shown with its statement line.
Ratio Analysis
Each ratio is computed for Godrej Properties in FY 2023-24 and FY 2022-23 from Annexures 1 and 2, and for DLF in FY 2023-24 from DLF's audited consolidated results for the year ended 31 March 2024. Amounts are in ₹ crore.
Profitability ratios: Godrej Properties FY 2023 and FY 2024 against DLF FY 2024
Chart data
| Item | Value (%) |
|---|---|
| Gross margin, Godrej FY 2023 | 44.86% |
| Gross margin, Godrej FY 2024 | 40.44% |
| Gross margin, DLF FY 2024 | 56.53% |
| Return on assets, Godrej FY 2023 | 2.69% |
| Return on assets, Godrej FY 2024 | 2.09% |
| Return on assets, DLF FY 2024 | 4.52% |
Liquidity and leverage: Godrej Properties FY 2023 and FY 2024 against DLF FY 2024 (times)
Chart data
| Item | Value |
|---|---|
| Current ratio, Godrej FY 2023 | 1.46 |
| Current ratio, Godrej FY 2024 | 1.43 |
| Current ratio, DLF FY 2024 | 2.26 |
| Quick ratio, Godrej FY 2023 | 0.59 |
| Quick ratio, Godrej FY 2024 | 0.43 |
| Quick ratio, DLF FY 2024 | 0.77 |
| Debt to equity, Godrej FY 2023 | 0.69 |
| Debt to equity, Godrej FY 2024 | 1.03 |
| Debt to equity, DLF FY 2024 | 0.12 |
1. Gross Profit Margin (Profitability)
Gross Profit Margin = (Revenue from Operations − Cost of Sales) / Revenue from Operations × 100
Cost of sales is the three inventory-related lines of Annexure 1 added together: cost of materials consumed, purchase of stock in trade and the change in inventories of finished goods and construction work-in-progress. For DLF it is the single line "cost of land, plots, constructed properties, development rights and others".
For Godrej Properties, FY 2024:
Cost of Sales = 6,787.01 + 178.05 − 5,157.03 = 1,808.03
Gross Profit Margin = (3,035.62 − 1,808.03) / 3,035.62 × 100 = 1,227.59 / 3,035.62 × 100 = 40.44%
For Godrej Properties, FY 2023:
Cost of Sales = 6,453.76 + 0 − 5,211.88 = 1,241.88
Gross Profit Margin = (2,252.26 − 1,241.88) / 2,252.26 × 100 = 1,010.38 / 2,252.26 × 100 = 44.86%
For DLF, FY 2024:
Gross Profit Margin = (6,427.00 − 2,793.76) / 6,427.00 × 100 = 3,633.24 / 6,427.00 × 100 = 56.53%
Godrej Properties' margin fell 4.4 points in a year and sits 16 points below DLF's. DLF keeps more of each rupee of revenue after land and construction cost.
2. Return on Assets (Profitability)
ROA = Profit for the Year / Total Assets × 100
For Godrej Properties, FY 2024: ROA = 747.06 / 35,734.86 × 100 = 2.09%
For Godrej Properties, FY 2023: ROA = 620.60 / 23,105.30 × 100 = 2.69%
For DLF, FY 2024: ROA = 2,723.53 / 60,262.39 × 100 = 4.52%
Godrej Properties earns less on its assets than DLF, and less than it did a year earlier. The reason is on the balance sheet rather than the income statement: nearly two-thirds of its assets are inventory that has not yet been recognized as revenue, and inventory earns nothing until it is.
3. Current Ratio (Liquidity)
Current Ratio = Total Current Assets / Total Current Liabilities
For Godrej Properties, FY 2024: Current Ratio = 32,450.15 / 22,731.94 = 1.43
For Godrej Properties, FY 2023: Current Ratio = 20,172.51 / 13,786.16 = 1.46
For DLF, FY 2024: Current Ratio = 32,018.39 / 14,136.61 = 2.26
Godrej Properties has a current ratio above 1 in both years, which is workable liquidity. DLF's is markedly higher.
4. Quick Ratio (Liquidity)
Quick Ratio = (Total Current Assets − Inventories) / Total Current Liabilities
For Godrej Properties, FY 2024: Quick Ratio = (32,450.15 − 22,564.62) / 22,731.94 = 9,885.53 / 22,731.94 = 0.43
For Godrej Properties, FY 2023: Quick Ratio = (20,172.51 − 12,073.40) / 13,786.16 = 8,099.11 / 13,786.16 = 0.59
For DLF, FY 2024: Quick Ratio = (32,018.39 − 21,154.13) / 14,136.61 = 10,864.26 / 14,136.61 = 0.77
Once inventory is taken out, Godrej Properties covers less than half of its current liabilities and the cover fell in the year. Its short-term position rests on selling units, not on cash it already holds. DLF's position is stronger on both measures.
5. Debt-to-Equity Ratio (Leverage)
Debt-to-Equity Ratio = Total Borrowings / Total Equity
Total borrowings are the current and non-current borrowing lines added together, because both are interest-bearing. Total equity includes non-controlling interests; on equity attributable to owners alone (₹9,992.51 crore) the FY 2024 ratio is 1.07.
For Godrej Properties, FY 2024:
Total Borrowings = 7,996.46 (current) + 2,660.00 (non-current) = 10,656.46
Debt-to-Equity Ratio = 10,656.46 / 10,301.44 = 1.03
For Godrej Properties, FY 2023:
Total Borrowings = 6,411.75 (current) + 0 (non-current) = 6,411.75
Debt-to-Equity Ratio = 6,411.75 / 9,287.15 = 0.69
For DLF, FY 2024:
Total Borrowings = 2,159.73 (current) + 2,438.99 (non-current) = 4,598.72
Debt-to-Equity Ratio = 4,598.72 / 39,431.61 = 0.12
Godrej Properties borrows about a rupee for every rupee of shareholders' funds, up from 69 paise a year earlier, while DLF borrows about twelve paise. That is the sharpest difference in this analysis, and it is what the equity multiplier of 3.47 in the DuPont section measures from the other side: return on equity holds up partly because the equity base is small relative to the assets it supports.
6. Inventory Turnover Ratio (Efficiency)
Inventory Turnover Ratio = Cost of Sales / Average Inventory
Cost of sales is the same figure used in ratio 1, not the ₹6,787.01 crore of materials consumed, because most of that spending was added to inventory rather than charged against the year's revenue. Average inventory is the mean of the opening and closing balances in Annexure 2. FY 2023 is not computed for Godrej Properties because the FY 2022 closing inventory is outside these statements.
For Godrej Properties, FY 2024:
Average Inventory = (22,564.62 + 12,073.40) / 2 = 17,319.01
Inventory Turnover Ratio = 1,808.03 / 17,319.01 = 0.10
For DLF, FY 2024:
Average Inventory = (21,154.13 + 19,361.23) / 2 = 20,257.68
Inventory Turnover Ratio = 2,793.76 / 20,257.68 = 0.14
DLF turns its inventory faster. Both numbers are low in absolute terms, and that is normal for a developer: a residential project sits in inventory for years, so a turnover near 0.1 means roughly a decade of stock at the current rate of recognition rather than a warning sign on its own. What matters is the direction, and Godrej Properties' inventory grew 86.9% while its cost of sales grew 45.6%.
DuPont Analysis
1. Net Profit Margin (Profitability)
DuPont components, FY 2023 to FY 2024
| Point of comparison | FY 2023 | FY 2024 |
|---|---|---|
| Net profit margin | FY 2023 27.55% | FY 2024 24.61% |
| Total asset turnover | FY 2023 0.0975 | FY 2024 0.0849 |
| Equity multiplier | FY 2023 2.49 | FY 2024 3.47 |
| Return on equity | FY 2023 6.68% | FY 2024 7.25% |
Net Profit Margin = Profit for the Year / Revenue from Operations × 100
For FY 2024: Net Profit Margin = 747.06 / 3,035.62 × 100 = 24.61%
For FY 2023: Net Profit Margin = 620.60 / 2,252.26 × 100 = 27.55%
2. Asset Efficiency (Total Asset Turnover)
Total Asset Turnover = Revenue from Operations / Total Assets
For FY 2024: Total Asset Turnover = 3,035.62 / 35,734.86 = 0.0849
For FY 2023: Total Asset Turnover = 2,252.26 / 23,105.30 = 0.0975
3. Financial Leverage (Equity Multiplier)
Equity Multiplier = Total Assets / Total Equity
For FY 2024: Equity Multiplier = 35,734.86 / 10,301.44 = 3.47
For FY 2023: Equity Multiplier = 23,105.30 / 9,287.15 = 2.49
4. Return on Equity (ROE)
ROE = Net Profit Margin × Total Asset Turnover × Equity Multiplier
For FY 2024: ROE = 24.61% × 0.0849 × 3.47 = 7.25%
For FY 2023: ROE = 27.55% × 0.0975 × 2.49 = 6.68%
Check against the direct calculation: 747.06 / 10,301.44 = 7.25% and 620.60 / 9,287.15 = 6.68%. The decomposition reconciles.
Key Observations:
- Net Profit Margin fell from 27.55% to 24.61%: less profit for each rupee of revenue, in line with the fall in gross margin.
- Total Asset Turnover fell from 0.0975 to 0.0849, because total assets grew 54.7% while revenue grew 34.8%.
- Equity Multiplier rose from 2.49 to 3.47, the new borrowings and customer advances funding assets that equity did not.
- Return on equity rose from 6.68% to 7.25% despite the fall in margin and turnover. The improvement came entirely from the third factor, which is the least durable of the three.
How Has Godrej Properties Performed Since FY 2023-24?
Revenue and profit have both grown sharply since the year this sample analyzes. For FY 2025-26 the company reported total income of ₹8,410.88 crore and net profit of ₹1,850.20 crore, up about 32% year on year, on booking value of ₹34,171 crore and what it called a record operating cash flow of ₹7,830 crore (PTI, 4 May 2026).
Total income and profit for the year, FY 2024 to FY 2026 (₹ crore)
Chart data
| Point (₹ crore) | Total income | Profit for the year |
|---|---|---|
| FY24 | 4,334.22 ₹ crore | 747.06 ₹ crore |
| FY25 | 6,967.05 ₹ crore | 1,399.89 ₹ crore |
| FY26 | 8,410.88 ₹ crore | 1,850.2 ₹ crore |
The FY 2023-24 statements left cash generation as the open question: consolidated operating activities used ₹692.57 crore in a year profit was ₹747.06 crore, and ₹2,860.64 crore the year before. The ₹7,830 crore for FY 2025-26 is the figure from the company's results announcement, the operating cash measure it uses in its own reporting, and not a line taken here from an audited cash flow statement. Before setting it beside Annexure 3, take the Ind AS 7 "net cash from operating activities" line from the FY 2025-26 statements on the company's investor page and compare like with like. The same applies to the ratios: everything in this sample is FY 2023-24, so recalculate from one set of statements and say which year you used.
Is Godrej Properties Financially Healthy?
On the FY 2023-24 consolidated figures, Godrej Properties is solvent and growing but not yet cash generative. Revenue from operations rose 34.8%, profit for the year reached ₹747.06 crore and a current ratio of 1.43 covers short-term obligations. Gross margin, return on assets, quick ratio and inventory turnover all trail DLF, total equity fell from 40.19% to 28.83% of total assets, borrowings of ₹10,656.46 crore exceed equity, and operating activities used ₹692.57 crore of cash.
Godrej Properties is in a sound position with a large pipeline and a brand that supports pre-sales, and its expansion, sustainability and construction programs position it for growth. The ratio comparison shows where it must improve to match DLF: cost of sales, asset use and liquidity. Cash conversion comes first. Two consecutive years of negative operating cash flow, half of profit before tax from a non-cash fair value gain, and ₹1,024.06 crore of interest capitalized rather than expensed mean reported profit runs ahead of cash. The test of FY 2023-24 is whether the ₹22,564.62 crore of inventory converts into revenue and cash as projects complete.
Annexures: Full Statements
All three annexures are the consolidated statements of Godrej Properties Limited and its subsidiaries from the Integrated Report 2023-24 (Consolidated Balance Sheet, Consolidated Statement of Profit and Loss, Consolidated Statement of Cash Flows). Amounts are in ₹ crore for the years ended 31 March 2024 and 31 March 2023; figures in brackets are negative. Percentages are calculated from the printed lines.
Annexure 1: Income Statement of Godrej Properties
| Line item | FY 2024 | % of revenue, FY 2024 | FY 2023 | % of revenue, FY 2023 |
| Revenue from operations | 3,035.62 | 100.00% | 2,252.26 | 100.00% |
| Other income | 1,298.60 | 42.78% | 786.74 | 34.93% |
| Total income | 4,334.22 | 142.78% | 3,039.00 | 134.93% |
| Cost of materials consumed | 6,787.01 | 223.58% | 6,453.76 | 286.55% |
| Purchase of stock in trade | 178.05 | 5.87% | 0.00 | 0.00% |
| Change in inventories of finished goods and construction work-in-progress | (5,157.03) | (169.88%) | (5,211.88) | (231.41%) |
| Employee benefits expense | 331.32 | 10.91% | 218.41 | 9.70% |
| Finance costs | 152.11 | 5.01% | 174.23 | 7.74% |
| Depreciation and amortization expense | 44.56 | 1.47% | 24.14 | 1.07% |
| Other expenses | 1,025.95 | 33.80% | 544.34 | 24.17% |
| Total expenses | 3,361.97 | 110.75% | 2,203.00 | 97.81% |
| Profit before share of joint ventures and tax | 972.25 | 32.03% | 836.00 | 37.12% |
| Share of profit / (loss) of joint ventures and associate | 27.74 | 0.91% | (40.73) | (1.81%) |
| Profit before tax | 999.99 | 32.94% | 795.27 | 35.31% |
| Total tax expense | 252.93 | 8.33% | 174.67 | 7.76% |
| Profit for the year | 747.06 | 24.61% | 620.60 | 27.55% |
| of which attributable to owners of the company | 725.27 | 571.39 | ||
| of which non-controlling interests | 21.79 | 49.21 | ||
| Derived: cost of sales (materials + stock in trade + change in inventories) | 1,808.03 | 59.56% | 1,241.88 | 55.14% |
| Derived: gross profit (revenue from operations − cost of sales) | 1,227.59 | 40.44% | 1,010.38 | 44.86% |
Annexure 2: Balance Sheet of Godrej Properties
| Line item | 31 March 2024 | % of total assets | 31 March 2023 | % of total assets |
| Total non-current assets | 3,284.71 | 9.19% | 2,932.79 | 12.69% |
| Inventories | 22,564.62 | 63.14% | 12,073.40 | 52.25% |
| Current investments | 1,788.25 | 5.00% | 1,080.47 | 4.68% |
| Trade receivables | 309.60 | 0.87% | 359.38 | 1.56% |
| Cash and cash equivalents | 1,319.81 | 3.69% | 714.81 | 3.09% |
| Bank balances other than cash and cash equivalents | 1,600.56 | 4.48% | 1,301.13 | 5.63% |
| Loans (current) | 1,779.03 | 4.98% | 2,394.86 | 10.36% |
| Other current financial assets | 1,231.81 | 3.45% | 1,330.44 | 5.76% |
| Other current non-financial assets | 1,856.47 | 5.20% | 918.02 | 3.97% |
| Total current assets | 32,450.15 | 90.81% | 20,172.51 | 87.31% |
| Total assets | 35,734.86 | 100.00% | 23,105.30 | 100.00% |
| Equity attributable to shareholders of the company | 9,992.51 | 27.96% | 9,264.20 | 40.10% |
| Non-controlling interest | 308.93 | 0.86% | 22.95 | 0.10% |
| Total equity | 10,301.44 | 28.83% | 9,287.15 | 40.19% |
| Borrowings (non-current) | 2,660.00 | 7.44% | 0.00 | 0.00% |
| Other non-current liabilities (lease liabilities, other financial liabilities, provisions) | 41.48 | 0.12% | 31.99 | 0.14% |
| Total non-current liabilities | 2,701.48 | 7.56% | 31.99 | 0.14% |
| Borrowings (current) | 7,996.46 | 22.38% | 6,411.75 | 27.75% |
| Lease liabilities (current) | 12.20 | 0.03% | 8.11 | 0.04% |
| Trade payables | 3,755.57 | 10.51% | 3,356.62 | 14.53% |
| Other current financial liabilities | 928.54 | 2.60% | 830.15 | 3.59% |
| Other current non-financial liabilities (including advances received against sale of units) | 9,930.91 | 27.79% | 3,096.41 | 13.40% |
| Provisions (current) | 41.85 | 0.12% | 46.22 | 0.20% |
| Current tax liabilities (net) | 66.41 | 0.19% | 36.90 | 0.16% |
| Total current liabilities | 22,731.94 | 63.61% | 13,786.16 | 59.67% |
| Total liabilities | 25,433.42 | 71.17% | 13,818.15 | 59.81% |
| Total equity and liabilities | 35,734.86 | 100.00% | 23,105.30 | 100.00% |
Annexure 3: Cash Flow Statement of Godrej Properties
| Line item | FY 2024 | FY 2023 |
| Cash flows from operating activities | ||
| Profit before tax | 999.99 | 795.27 |
| Depreciation and amortization expense | 44.56 | 24.14 |
| Finance costs | 152.11 | 174.23 |
| Interest income | (592.99) | (617.08) |
| Fair value gain upon acquisition of control | (497.07) | 0.00 |
| Profit on sale of investments (net) | (98.31) | (127.45) |
| Other non-cash and non-operating adjustments (net) | (111.71) | 93.44 |
| Operating (loss) / profit before working capital changes | (103.42) | 342.55 |
| (Increase) in inventories | (4,916.35) | (3,987.28) |
| Increase in non-financial liabilities and provisions | 4,822.15 | 993.85 |
| Other working capital movements (net) | (230.42) | (40.81) |
| Changes in working capital | (324.62) | (3,034.24) |
| Direct taxes paid (net) | (264.53) | (168.95) |
| Net cash used in operating activities | (692.57) | (2,860.64) |
| Net cash (used in) / from investing activities | (2,079.76) | 2,488.06 |
| Net cash from financing activities | 3,257.95 | 832.22 |
| Net increase in cash and cash equivalents | 485.62 | 459.64 |
| Opening balance | 714.81 | 179.08 |
| Cash of subsidiaries acquired during the year | 105.40 | 75.86 |
| Effect of exchange rate fluctuations | 0.17 | 0.23 |
| Closing balance | 1,306.00 | 714.81 |
The closing balance of ₹1,306.00 crore is the balance-sheet cash and cash equivalents of ₹1,319.81 crore net of a ₹13.81 crore bank overdraft repayable on demand, as the statement's own reconciliation note shows. The adjustment and working-capital lines that are grouped as "other" above are printed individually in the report; the totals in bold are the statement's own.
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Sources
- Godrej Properties Limited (2024) Integrated Report 2023-24: consolidated balance sheet, statement of profit and loss and statement of cash flows; Note 1(i) revenue recognition; Note 27 other current non-financial liabilities; Note 34 finance costs; independent auditor's report, key audit matters. Available at: godrejproperties.com (PDF)
- Godrej Properties Limited (2026) Investors: financials. Available at: godrejproperties.com/investors/financials
- DLF Limited (2024) Statement of audited consolidated financial results for the quarter and year ended 31 March 2024. Available at: dlf.in (PDF)
- Press Trust of India (2026) 'Godrej Properties FY26 profit jumps 32 pc to Rs 1,850 crore', 4 May. Available at: telanganatoday.com
- CFA Institute (2025) Introduction to Financial Statement Analysis, refresher reading. Available at: cfainstitute.org
- India Brand Equity Foundation, IBEF (2026) Indian Real Estate Industry Report, accessed 24 September 2026. Available at: ibef.org/industry/real-estate-india
Frequently Asked Questions
What should a financial analysis assignment include?
An industry overview, the company's strategy, a review of its accounting policies and earnings quality, common-size income statement and balance sheet analysis, a set of ratios grouped by profitability, liquidity, leverage and efficiency, a peer comparison, and a DuPont breakdown of return on equity. This sample follows that order.
Which financial year do the Godrej Properties figures cover?
The figures in this sample are FY 2023-24 (year ended 31 March 2024), compared with FY 2022-23 (year ended 31 March 2023). They were taken from the consolidated statements in the company's Integrated Report 2023-24, and the annexures reproduce the consolidated income statement, balance sheet and cash flow statement. Godrej Properties has since reported FY26 results, summarised near the end of the sample so you can see how the picture moved.
How do you calculate ROE using DuPont analysis?
Multiply three components: net profit margin (net profit divided by revenue), total asset turnover (revenue divided by total assets) and the equity multiplier (total assets divided by total equity). For Godrej Properties in FY 2023-24 that gives 24.61% x 0.0849 x 3.47, or a return on equity of about 7.25%, which matches profit for the year divided by total equity.
Is Godrej Properties financially healthy?
On the FY 2023-24 consolidated figures, yes, with caveats. Profit and revenue both grew, and the current ratio of 1.43 shows workable liquidity. But return on assets of 2.09% and a quick ratio of 0.43 both trail DLF, total borrowings of ₹10,656.46 crore exceed total equity of ₹10,301.44 crore, equity fell from 40.19% to 28.83% of total assets, and operating activities used ₹692.57 crore of cash in a year when profit rose.
