Macrotech Developers Limited (Lodha) reported strong performance in the March quarter of FY 2022. One of the major attractions was its pre-India sale. 3,456 crore, up 37% year-on-year (YoY) and a record high in a quarter. Collections grew by 36% in the March quarter as compared to the same quarter last year. For FY22, pre-sales at 9,024 crore, increased over 50% and was in line with its guidance.
The company’s management said that the affordable and middle income segment accounted for 65% of sales for 4QFY22 and is on an upward trajectory. For FY23, the company has guided for sales booking of 11,500 crore, this is 27% higher than the FY22 guidance.
Jefferies India Pvt Ltd analysts say Lodha’s FY23 pre-sales guidance was ahead of their estimates 10,600 crore aided by a strong housing cycle. “A third net debt reduction for India businesses is also expected,” the Jefferies report said.
In Q4FY22, Lodha’s net debt declined to Rs 9,300 crore from Rs 9,890 crore in 3QFY22, mainly due to easing of borrowing costs. Analysts say debt reduction momentum has been good so far and will continue to be one of the key factors for the stock’s outlook.
As far as the launch is concerned, the company’s management said that it is in the advanced stage of signing definitive documents for several joint development projects. Lodha is targeting two-four new launches in FY23.
“We are very confident of achieving approximately 25% CAGR growth in pre-sales in the medium term. Our JDA strategy will enable us to achieve this growth in a very mild manner,” the company said in a press release. CAGR is short for Compound Annual Growth Rate.
Meanwhile, cost inflation has been a concern for investors in real estate stocks. According to the Lodha Management, the overall impact of commodity inflation is around 2.5% of the selling price at the portfolio level. That said, significant ready and advanced under-construction inventory costs provide a natural hedge against inflation, management said.