Lodha reports robust Q4 performance; pace of debt cut key
1 min read . Updated: 27 Apr 2022, 12:04 PM IST
Premium- Analysts say, Lodha's pace of reduction in debt so far has been decent and would remain among the crucial factors for the stock's outlook.
Macrotech Developers Ltd (Lodha) reported robust performance in the March quarter of fiscal year 2022. Among the key highlights were its India pre-sales at ₹3,456 crores, up 37% year-on-year (y-o-y) and a record high seen in a quarter. Collections grew 36% in the March quarter compared to the same quarter last year. For FY22, pre-sales at ₹9,024 crores, rose more than 50% y-o-y and was in line with its guidance.
The company's management said that affordable and mid-income segment was at 65% of sales for 4QFY22 and is on a rising trajectory. For FY23, the company has guided for sales booking of ₹11,500 crore, this is 27% higher than FY22 guidance.
Analysts at Jefferies India Pvt Ltd point out that Lodha's FY23 pre-sales guidance was ahead of their estimate of ₹10,600 crore aided by a strong housing cycle. "A further 1/3rd net-debt reduction for the India business is also expected," added the Jefferies report.
In Q4FY22, Lodha's net debt reduced to Rs9,300 crore from Rs9,890 crore in 3QFY22, mainly because of easing cost of borrowing. Analysts say, the pace of reduction in debt so far has been decent and would remain among the crucial factors for the stock's outlook.
As far launches are concerned, the company's management said that it is in advanced stage of signing definitive documents for multiple joint development projects. Lodha is targeting two-four new launches in FY23.
"We are very confident of achieving around 25% CAGR growth in pre-sales over medium term. Our JDA strategy will enable us to achieve this growth in a very capital light manner," the company said in a press release. CAGR is short for compounded annual growth rate.
Meanwhile, cost inflation has been a worry for investors in real estate stocks. According to the Lodha management, the overall impact of commodity inflation is around 2.5% of sales value at the portfolio level. That said, significant ready and advanced under-construction inventory provides a natural hedge against cost inflation, the management said.
