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Macrotech Developers Ltd. (Lodha) announced its operational update of the first quarter of fiscal 2023 (Q1FY23) on Wednesday.

On a sequential basis, Lodha's sales booking in Q1FY23 declined 19%. Even so, it was the best ever sales booking for any April-June quarter for the company. "This healthy performance came despite Q1 being seasonably weak due to the vacation period and onset of monsoon, and in spite of the stamp duty increasing by 1% w.e.f. April 1, 2022," said analysts at Edelweiss Securities Ltd.

Compared to the year-ago period, sales booking surged 194%. The company has maintained its 11,500 crore pre-sales guidance for FY23. Demand has remained robust for credible Grade A developers across segments despite evolving macro-economic conditions, the management said.

Analysts at Edelweiss note that the company has already achieved 75% of the incremental sales growth required to meet FY23 guidance. “We believe Lodha can achieve its guidance considering the revival in Mumbai housing demand and a strong launch pipeline of around Rs13,300 crore for FY23."

Another key takeaway was debt reduction of 442 crore sequentially to 8,858 crore for its India business. Note that the company's management aims to cut down its net debt to below 6,000 crore in FY23.

"We believe that the company is now “off the treadmill" as strong operating cash flows, reduced interest costs (mainly owing to absolute debt reduction) and asset light land bank additions will likely result in organic net debt reduction over FY23-24E," said analysts at ICICI Securities Ltd.

Apart from paring of debt, faster land monetisation at Palava, portfolio growth, geographical diversification and annuity asset sale can be potential stock catalysts, added the Edelweiss report.

Meanwhile, the company recently forayed into the Bengaluru market, with a joint development agreement of 1.2 million square feet. In Q1FY23, the company added three such new projects across Mumbai Metropolitan Region, Pune and Bengaluru.

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