Macrotech Developers sets strong foundation for the new fiscal year
Macrotech Developers Ltd (Lodha) impressed the Street with its robust pre-sales or bookings for the June quarter (Q1FY24). Bookings grew by 17% year-on-year to ₹3,353 crore, also the highest Q1 number delivered by the company. Lodha has now achieved 23% of its FY24 pre-sales guidance of ₹14,500 crore in the first quarter.
Demand is robust, says Lodha’s management. The company’s shares are up 4% since the update after market hours on Tuesday. Thus, it requires 21% year-on-year growth in bookings in Q2–Q4 FY24 to meet the guidance, reckon analysts from Nuvama Research in a report dated 5 July.
Reserve Bank of India has paused interest rate hiking cycle. With likelihood of a downward journey of interest rates in the next few quarters, the management sees momentum for housing strengthening further. The company also added five new projects with gross development value (GDV) potential of ₹12,000 crore across different micro-markets.
For perspective, Lodha’s full year guidance for new project additions is ₹17,500 crore. “The company’s business development GDV in Q1FY24 was a positive surprise for the market and that is driving sentiment towards the stock. That said, granular details on locations of these projects will be awaited," Parikshit Kandpal, institutional research analyst at HDFC Securities Ltd, said.
Collections at ₹2,403 crore in Q1FY24, fell sequentially and annually, but the management expects collections to pick up in the remaining quarters of the fiscal year. More importantly, net debt increased marginally to ₹7,264 crore from ₹7,073 crore, sequentially, due to investments on business development projects. Lodha plans to reduce debt to lower than 0.5x equity, as guided for FY24.
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