Macrotech Developers rallies 6%, hits new high on growth prospects

Shares of Macrotech Developers (Lodha) rallied 6 per cent to Rs 1,516, hitting a new high on the BSE in Tuesday’s intra-day trade, on strong growth plans.

The stock of the real estate developer has surpassed its previous high of Rs 1,461.75, touched on November 17, 2021. In the past one month, it has zoomed 44 per cent as compared to a 2-per cent decline in the S&P BSE Sensex.

Macrotech Developers plans to nearly double its pre-sales to Rs 14,000 crore by financial year 2023-24 (FY24) and further grow to Rs 20,000 crore by FY26. Lodha intends to grow in under-represented micro markets of Mumbai Metropolitan Region (MMR) and Pune in a capital efficient manner. The company is also exploring plans to enter into the Bangalore market to cater to the needs of even better quality development in a city which is seeing significant creation of technology jobs and wealth creation.

Earlier this month, the company raised Rs 4,000 crore through qualifited institutional placement (QIP) and had received overwhelming response from the existing and new as well as global and domestic investors. The book was oversubscribed by more than 3 times and witnessed traction from diversified set of investors such as, sovereign fund, pension fund, mutual funds, insurers etc.

“The Institutional placement saw new marquee investors like GIC, Oppenheimer, Universities Superannuation Scheme (USS), Amundi, Tata Mutual Fund etc. endorsing the growth potential of the housing industry and Lodha’s leadership position therein,” the company said in statement.

The management said the company sees that all the structural factors are in place for significant growth in volumes in housing, especially in the middle income and affordable segments, which is a focus area for the company.

“With this fund raise; we are well on course of achieving dual target of deleveraging and capital light expansion through JDA model. Our debt to equity now stands at 0.75x. We are seeing a very robust pipeline of JDA (joint developer agreement) deals and plan to invest nearly Rs 3,000 crore over the course of next 6 quarters through these JDAs and add about Rs 40,000 crore worth of GDV (gross development value) to our portfolio,” said Abhishek Lodha, Managing Director, Macrotech Developers.

Analysts at Emkay Global Financial Services believe Macrotech is putting in place the right ingredients for scaling-up operations via expanding management bandwidth by new hires across levels and growth capital. “We see upside risks to our estimates and target price emerging from outright land acquisition and expansion beyond MMR and Pune,” the brokerage firm said in recent report. Currently, the stock is trading above target price of Rs 1,250 per share.

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