Macrotech Developers rallied 24% after hitting a low on Feb 24; should you buy

Macrotech Developers was the lead artist in smelly realty index During intra-day trade on Thursday. The Nifty Realty index was trading at 403 points with a gain of 1.3%. Shares of Macrotech Developers have gained 26 per cent in the last four trading days. The company’s stock reached a 52-week low 711 on February 24. The company’s stock declined between February 13 and February 24 and recovered thereafter.

Macrotech Developers stock has declined by 7.33% in last one month. The company’s shares follow the same trend as Nifty Realty, which has underperformed the benchmark index in the last one month.

The housing segment is expected to witness growth over the next decade as the country’s per capita income rises from $2,000 to $5,000.

Brokerage: Motilal Oswal

Recommendation: We maintain purchases with SOTP based TP 1,250

The stock brokerage firm said the company has drawn up a clear growth strategy with an aim to capture market share with niche presence in micro-markets. In line with its growth strategy, the company has already exceeded its full year BD guidance by adding 11 new JDA projects with a GDV of INR178b.

“At CMP, the stock trades at a 15% discount to its existing project NAV, which indicates that the market is not placing any value on its ability to successfully monetize existing projects, let alone fund growth. We believe this is inappropriate given the company’s performance track record and the market Leadership Situation We maintain buy with SOTP based TP of 1,250 (SOTP details in Exhibit 14),” the stock brokerage firm said.

Brokerage: Sharekhan by BNP Paribas

Recommendation: Potential gain of 40% maintained

“Its balance sheet is improving Net The debt has been reduced to Rs 8,000 crore in Q3 FY2023 and is expected to further reduce over the next two years. At CMP, the stock is attractively valued at 2.1x P/B to FY25E earnings, compared to an average 3.5x 1 year forward P/B multiple since listing. We believe current valuations adequately factor in headwinds and a significant stock correction has made the risk reward favorable Investment For the next 12-15 months. Hence, we maintain our positive view on the stock and expect a potential upside of 40%,” the brokerage firm said.

It is also optimistic of a resilient housing demand in teh economy. That’s why the brokerage firm expects Macrotech to stay on track and exceed its pre-sales guidance for FY2023 while already surpassing new project addition targets. The company also has some strong projects lined up for launch in the current financial year.