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Shares of Macrotech Developers hit a 52-week high at Rs 611.45, as they rallied 5 per cent on the BSE in Friday’s intra-day on positive outlook. In past one month, the stock of real estate developer has surged 27 per cent, as compared to 1.7 per cent rise in the S&P BSE Sensex. It had hit a record high of Rs 769.30 (adjusted to 1:1 bonus) on December 1, 2021.
Macrotech Developers (MDL), formerly known as Lodha Developers, is one of the largest real estate developers in India with a market leader position in Mumbai and Thane. The company also has the largest land bank in the country, totaling over 4,300 acres as of March 31, 2023 (inclusive of its ongoing as well as planned projects). MDL is focused on residential development in the MMR, with some projects in Pune and Bengaluru.
MDL’s operating performance is expected to remain healthy in FY24, supported by healthy enduser demand, a strong launch pipeline and healthy affordability, while maintaining a reducing debt trajectory.
MDL enjoys healthy pre-sales backed by its diversified product segment and strong reputation. Pre-sales in the residential sector are expected to remain strong supported by sizeable unsold inventory of around Rs 30,000 crore as on March 31, 2023 and a new launch pipeline of 10.6 million sq ft in FY24. Through historic land acquisitions, MDL has access to sizeable land parcels (4,300 acres as of March 31, 2023, of which 300 acres is dedicated for digital infrastructure) providing significant potential for future project development, according to ICRA.
The rating agency, on Tuesday, reaffirmed the long-term ratings of MDL’s and outlook revised to Positive from Stable.
The revision in outlook on the long-term rating to Positive factors in MDL’s strong operating performance in FY23, marked by healthy growth in collections and cash flows from operations (CFO), which has supported the reduction in debt levels.
MDL’s operating performance is expected to remain healthy in FY24, supported by healthy enduser demand, a strong launch pipeline and healthy affordability, while maintaining a reducing debt trajectory, ICRA said rationale.
In-line with its medium-term target, the company expects to deliver a 20 per cent growth in pre-sales to Rs 14,500 crore in FY24. The growth will be largely driven by Rs 26,400 crore of ready and ongoing inventory and 10.6msf of launches with a GDV of around Rs 13,000 crore, which can increase further with project additions in FY24, according to analysts at Motilal Oswal Financial Services.
The company’s future pipeline and sector tailwinds will help to sustain pre-sales growth rate of 20 per cent over the next two to three years. Furthermore, the company’s indication on existing profitability assures that the growth will be driven by healthy profitability too, the brokerage firm said in March quarter result update.
