Lodha reports robust sales in Q3, stock up around 2%

Market


Shares of Mumbai-based real estate developer Macrotech Developers Ltd (Lodha) rose around 2% on the NSE in Friday’s intraday trade reacting to the company’s Q3FY22 operational update.

In a press release, the company said its sales booking stood at 2,608 crore, an increase of 30% sequentially and 40% on a year-on-year (y-o-y) basis and collections rose 11% sequentially and 44% y-o-y to 2,127 crore. Further, the company said that its London properties continued to see healthy sales of 1,900 crore with 3QFY22 being the best ever quarter.

“With the underlying consolidation in place and strong momentum witnessed in MMR, Lodha, the dominant player of MMR, is all set to be a key beneficiary,” analysts at Antique Stock Broking Ltd said in a report on 7 January.

Investors should note that property sales in the Mumbai Metropolitan Region (MMR) have been robust in recent months backed by lower interest rates, improved affordability and stable real estate prices. According to the latest report published by property consultant firm Knight Frank India, the Mumbai residential market contributed 30% of launches and 27% of sales volume on an all- India level during 2021. The launches noted a surge of 27% YoY during H22021, 64% of these were in Q4 2021, said the Knight Frank report.

The report further added that the company is on track to deleverage. “Lodha on the back of strong collections and qualified institutional placement (QIP) money continues to de-leverage balance sheet. Net debt in the quarter is at 9,925 crore and reduced by 2,552 crore, already achieving its full-year guidance.” Recently, the company raise 4,000 crore via QIP and used the funds to acquire projects under the joint development.

Sharing a positive view on the company’s performance, analysts at ICICI Securities Ltd said, “As per our channel checks, the company is set to launch the final tower at its Park, Worli project named “Codename 2024” in Jan’22. The company has achieved 9MFY22 sales bookings of 5,570 crore in its India business and we believe that it is on track to achieve its FY22 sales guidance of 9,000 crore.”

“While this implies Q4FY22 sales bookings of over 3,000 crore, we believe that continued momentum in residential sales and logistics/warehousing vertical may enable the company to achieve its guidance,” added the ICICI report.

That said, the domestic brokerage house cautioned that any adverse impact from a third Covid wave is the key risk to achieving the guidance.

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