Macrotech Developers (Lodha) clocked pre-sales of ~Rs 28.1 bn in Q1FY23 (up 194% y-o-y, however down 19% q-o-q) —its best-ever for any Apr-Jun quarter. The firm maintained the ~Rs 115-bn pre-sales steering for FY23 (~Rs 90 bn in FY22). Collections shot up by 53% y-o-y (down 8% q-o-q). Net debt for the India enterprise dipped to ~Rs 89 bn (~Rs 93 bn in FY22). It additionally added three JDA initiatives with GDV of ~Rs 62 bn (FY23 goal of Rs 150 bn) and entered the Bengaluru market in Q1FY23. With the housing cycle doubtless turning, we anticipate the gross sales momentum to remain wholesome going forward. Maintain ‘Buy’ with a TP of Rs 1,392.
Sales momentum improves: New gross sales wholesome efficiency got here regardless of Q1 being seasonally weak because of the trip interval and onset of monsoon, and despite the stamp responsibility growing by 1% w.e.f. April 1, 2022. The firm must notch up gross sales of ~Rs 87 bn in 9MFY23 to realize its steering – progress of simply ~8% y-o-y. It has already achieved 75% of the incremental gross sales progress required to satisfy FY23 steering.
Business growth continues: The agency added three new JDA initiatives (throughout the MMR, Pune and Bengaluru) spanning ~5.1msf with a GDV of ~Rs 62 bn to its undertaking portfolio through the quarter.
Outlook and valuation: Well-placed for progress: As highlighted earlier, RERA-driven consolidation is throwing up progress alternatives for organised gamers resembling Lodha. Revival in housing demand, Lodha’s management place within the MMR, which is registering wholesome gross sales, strong enterprise growth efficiency and prepared stock liquidation are more likely to culminate in strong money flows. Faster land monetisation at Palava, portfolio progress, geographical diversification and annuity asset sale will be potential inventory catalysts. We preserve ‘BUY/SN’ with a TP of Rs 1,392 (on a par with Sep-23E primarily based NAV of Rs 1,392).
Source: www.financialexpress.com”