Lodha Achieves Record Q1FY25 Pre-Sales with Robust Margins

Macrotech Developers Ltd (Lodha) announced its financial results for the quarter ended June 30, 2024, showcasing a stellar performance. The company reported its best-ever Q1 pre-sales performance with robust margins, adding three new projects in the Mumbai Metropolitan Region (MMR) and Pune, with a combined Gross Development Value (GDV) of ₹111 billion.

For Q1FY25, Lodha’s pre-sales surged to ₹40.3 billion, marking a 20% year-on-year (YoY) increase. Collections also saw a significant rise, reaching ₹26.9 billion, up 12% YoY. The company’s revenues from operations soared to ₹28.5 billion, a remarkable 76% YoY growth. Adjusted EBITDA doubled to ₹9.6 billion, reflecting a 107% YoY increase. The Profit After Tax (PAT) exhibited the most substantial growth, climbing to ₹4.8 billion, an impressive 186% YoY rise.

Commenting on the financial performance, the MD and CEO of Macrotech Developers Ltd, Mr Abhishek Lodha, said, “Q1FY25 was our best ever 1st quarter with INR 40.3 bn of Pre-sales – our 2nd consecutive quarter of 40 bn+ pre-sales. The icing on the cake is that these strong pre-sales have come alongside robust embedded EBITDA margins of 33%. Delivery of strong pre-sales from a diverse portfolio of projects with strong margins showcases the predictability and consistency of our business model.

We are enthused by our performance in Pune, having achieved INR ~10bn of pre-sales in Q1 (more than 50% of our pre-sales in Pune in the previous year), setting the stage for becoming the largest player in the city in the next few years. What is also heartening to note is that this strong 20% YoY growth in pre-sales has come despite inclement hot weather conditions and election season impacting footfalls. We believe we are in the early stage of a multi-decade housing up-cycle as India transitions from being a low-income economy to a mid-income economy.”

He further added, “Continuity of growth-oriented policy will likely further support investments and growth in the economy, leading to sustenance in housing demand strength. The recently announced union budget also indicates the same. The government’s focus on skilling the workforce as well as job creation and incentivising the ecosystem for the same is laudable as it would enhance productivity and support economic growth. Focus on housing, infrastructure development and urban planning is expected to further provide a boost to the housing sector on a continued basis. Other key steps such as the reinstatement of interest subsidy for entry-level home buyers and reduction in capital gains tax on the sale of property are also encouraging for the sector.”

Mr Abhishek Lodha stated that Lodha has achieved more than 50% of its business development guidance in the first quarter itself. During this period, the company added three new projects in prime locations within the Mumbai Metropolitan Region (MMR) and Pune, with a combined Gross Development Value (GDV) of ₹111 billion. Leveraging the attractiveness of its brand to landowners and a strong balance sheet, Lodha has been able to add new projects worth over ₹650 billion since its IPO, following a “super market” strategy in each micro-market. The large number of projects tied up across several micro-markets in the cities where Lodha operates provides the company with the opportunity for granular, predictable growth over the long term.

He also added that despite significant investments in business development this quarter, Lodha’s net debt stands at ₹43.2 billion (0.24x Net Debt/Equity), well below its ceiling of 0.5x Net Debt/Equity. The company’s consistent performance, strong business fundamentals, and robust balance sheet have led to a credit rating upgrade to ‘AA- (Positive)’ by Crisil. Additionally, Lodha’s exit cost of debt for Q1FY25 is 9.1%, down approximately 30 basis points for the quarter, positioning it among the lowest in the industry.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.