Lodha reports decent pre-sales in Q2FY23, stock rises 2%

Shares of Macrotech Developers Ltd. (Lodha) rose 2% on the National Stock Exchange in opening deals on Thursday, reacting to the company's Q2FY23 operational update. The real estate developer has reported sales bookings despite Q2 typically being a weak quarter for the industry due to monsoon and the inauspicious shradh period.

Lodha achieved its best ever Q2 pre-sales of ₹3,148 crore (provisional), a growth of 57% on year-on-year (y-o-y) and 12% sequentially. The company's H1FY23 sales totaled ₹6,004 crore which is around 52% of its full year guidance of ₹11,500 crore.

"Generally, Q2 is the weakest quarter of the year due to monsoons and inauspicious period (Pitrupaksh/Shraadh) and consequently, H1 tends to be ~40-45% of full year sales," the company said in a press release. However, strong housing demand from tier-1 developers in India aided sales, it said.

Collections at ₹2,375 crore in 2QFY23 were up 24% y-o-y. Collections were predictably impacted by seasonal factors - lower construction activity during monsoon and deferral of registerations during 15 day inauspicious period, said the press release.

In another positive, its net debt fell by ₹60 crore to ₹8,796 crore.

Further, during the quarter, the company added four new projects with an estimated 2.2 million square feet of saleable area and gross development value (GDV) of ₹3,100 crore across various micro-markets of Mumbai and Pune. In H1FY23, the company added projects worth ₹9,300 crore of GDV, which is around 62% of full year guidance of Rs15,000 crore of GDV.

Meanwhile, with respect to Lodah's UK operations, the company completed redemption of bonds of worth $55 million. In addition, it saw repatriation of Rs100 crore from the UK to India and the company expects another Rs1,000 crore to be repatriated in CY23.

In this calendar year so far, shares of the company have declined 21%. In comparison, the Nifty Realty Index is down around 11%. A scenario of rising interest rates is translating into higher home loans rates, which has been hurting sentiment for the residential real estate industry.