Macrotech Developers aims to cut debt by nearly 40% to around ₹5,000 cr: MD
3 min read . Updated: 29 Jan 2023, 12:42 PM IST
PremiumThe firm saw reduction in debt by ₹753 crore in the December quarter to ₹8,042 crore on back of strong sales bookings and cash flows.
Realty firm Macrotech Developers Ltd aims to reduce its net debt by nearly 40 per cent to around ₹5,000 crore in the current calendar year with the help of surplus cash flow from strong housing sales, said MD and CEO Abhishek Lodha.
The Mumbai-based firm markets its properties under the Lodha brand.
Macrotech Developers MD and CEO Abhishek Lodha was bullish on the long term growth potential of India's residential real estate market, in an interview with news agency PTI.
The firm saw reduction in debt by ₹753 crore in the December quarter to ₹8,042 crore on back of strong sales bookings and cash flows.
"We are hoping to reduce debt further by ₹1,000 crore by end of this fiscal year to about ₹7000 crore," said MD, CEO Abhishek Lodha. The company plans to cut debt by ₹500-800 crore every quarter.
"We will hope to be close to ₹5,000 crore of net debt sometime by end of this calendar year," he added.
There is no plan of becoming a zero-debt company, said MD and CEO Abhishek Lodha.
On the overall operational performance during the current fiscal so far, Lodha said the company has done well in all three key metrics -- sales bookings, embedded EBIDTA margin and addition of new land parcels for future development.
"In pre-sales, we had a strongest ever third quarter with sales of over ₹3,000 crore. So far, we have done over ₹9,000 crore of sales in the first nine months of this fiscal, which is more than the sales we did for full year of FY'22 and puts us on course for exceeding the guidance for FY'23 which is ₹11,500 crore," he said.
Macrotech Developers' sales bookings rose 16 per cent to ₹3,035 crore in the December quarter.
The company sold properties worth ₹9,039 crore in the first three quarters of this fiscal year as against ₹5,570 crore in the corresponding period of the previous year.
The bulk of sales bookings or pre-sales came for housing projects.
Lodha said the embedded EBIDTA margin was 31 per cent in Q3 and 33 per cent during April-December. "If we translate it for the full year, it will lead to almost ₹3,500 crore plus of EBIDTA."
On new business development, Lodha said the company has already added many land parcels so far this fiscal that can generate sales revenue of an estimated ₹17,800 crore as against the full-year new business development guidance of ₹15,000 crore.
Asked about fresh sales guidance for FY23, Lodha said the company is now on course to exceed the FY'22 target but has not set any new goal.
The demand for residential properties continues to rise on strong consumer sentiments, Lodha said, adding that consolidation of supply-demand has been happening towards trusted developers.
Similarly, the company has not set any new target for project additions for the full FY'23 but there will be some land acquisitions.
Macrotech Developers acquires land outright and also forms joint ventures with landowners to create land banks for future development.
The company will continue to focus on the Mumbai Metropolitan Region (MMR) and Pune markets. It has recently forayed into the Bengaluru residential market with one housing project and is in talks to add another one.
Last week, Macrotech Developers reported a 41 per cent increase in its consolidated net profit at ₹404.98 crore for the quarter ended December 2022.
Its net profit stood at ₹286.38 crore in the year-ago period.
However, the total income fell to ₹1,902.44 crore in the third quarter of this fiscal from ₹2,155.70 crore in the corresponding period of the previous year.
Macrotech Developers has delivered around 90 million square feet of real estate and is currently developing around 107 million square feet under its ongoing and planned portfolio.
