Lodha investors cheers robust Q4FY22 pre-sales, debt reduction

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Shares of real estate firm Macrotech Developers Ltd., formerly known as Lodha, rose around 1.5% on the National Stock Exchange in opening deals on Thursday, in response to the company’s Q4FY22 business update.

In the March quarter, Lodha’s pre-sales rose 37% year-on-year (y-o-y) to a record high of 3,460 crore. With this, the company has met its pre-sales target of 9,000 crore for FY22. Collections rose 36% on year and 34% sequentially in the March quarter of FY22.

Robust sales and improved collections helped the company pare down some more of its debt. For its India business, net debt declined 590 crore sequentially to 9,310 crore. Investors would remember that the company had raised funds via a qualified institutional placement in the December quarter.

According to the company’s management, its projects in the UK also did well in 4QFY22, clocking sales worth 1,700 crore. For FY22, sales of projects in the UK stood at 5,300 crore. 

As per a press release, during the March quarter Lodha made early redemption of $170 million senior secured notes of the total outstanding amount of $225 million.

According to analysts at Jefferies India Pvt. Ltd, combined with the UK bond pre-payment, Lodha’s consolidated net debt is estimated to have declined around 1,800 crore sequentially to 9,600 crore.

As far as sales outlook is concerned, Jefferies analysts forecast Lodha’s FY23 pre-sales to rise 18% y-o-y to 10,600 crore. “Given the strong 4Q exit momentum, and a weak Covid impacted 1Q in base, we believe significant upgrades to the estimate are possible,” added the Jefferies report.

Sharing the optimism, analysts at ICICI Securities Ltd said, Lodha has added new projects having total saleable area of 8.8 million square feet in 9MFY22, majority of which are slated for FY23 launch. “Considering the strong launch pipeline and momentum in sustenance sales, we estimate sales bookings of Rs11,010 crore in FY23E and Rs11,900 crore in FY24E,” added the report.

While these developments are positive, investors in this stock would watch out for commentary on new launches, projects in pipeline and commentary on price hikes when the company announces its Q4 earnings.

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