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Business News/ Markets / Stock Markets/  Multibagger Stock: Macrotech Developers yielded 160% return in a year, gained over 400% in 3 years

Multibagger Stock: Macrotech Developers yielded 160% return in a year, gained over 400% in 3 years

Macrotech Developers stock has gained 404% in 3 years, hitting ₹1,227 apiece. The company reported a 40% growth in sales bookings in Q4 FY24, reaching ₹4,230 crore. It successfully raised ₹3,300 crore through a QIP last month.

Multibagger stock: Over the last three years, the company's shares have gained 404%. (AFP)Premium
Multibagger stock: Over the last three years, the company's shares have gained 404%. (AFP)

Real estate stocks have emerged as hot picks on Dalal Street in the past year, fueled by a surge in demand for residential properties and office spaces. With real estate developers consistently reporting record sales quarter after quarter, the trend underscores the robust growth in the Indian economy. 

As disposable incomes rise among Indians, more individuals are opting to invest in real estate, which remains a preferred choice for households in India.

Amid this backdrop, the majority of constituents of the Nifty Realty index have delivered stellar returns, and Macrotech Developers is one such stock in this regard. The company's shares, which were valued at 456 apiece a year ago, have jumped 160% to trade at the current level of 1,227 apiece. 

Also Read: Godrej Properties shares spike over 7.5% to record a new all-time high on strong Q4 sales

This boom has resulted in the stock gaining 404% in 3 years and 481% from its all-time low of 211.30 apiece. The company's shares hit the Indian secondary market in April 2021.

Robust sales

The company, which sells its properties under the Lodha brand, reported a remarkable 40% annual growth in its sales bookings, reaching 4,230 crore in the fourth quarter of the last fiscal year, driven by robust housing demand. This marked the company's best quarterly performance to date.

For the full FY24, it achieved a 20% growth in its sales bookings, reaching a record of 14,520 crore compared to 12,060 crore in the previous financial year, as stated in a regulatory filing.

Also Read: Prestige Group sets record with FY24 sales topping 21,040 crore

On the business development front, the company successfully added new projects with a cumulative gross development value (GDV) of 20, 300 crore in Q4 FY24 across various micro-markets in MMR, Pune, and Bengaluru. This exceeded the company's guidance of 17,500 crore.

The company boasts a notable presence in the Mumbai Metropolitan Region (MMR) and Pune, with recent forays into the Bengaluru housing market. Leveraging a dual approach, it acquires land outright while also forming strategic partnerships with landlords to secure a land bank for future development initiatives.

Debt reduction achieved

Benefiting from robust operating cash flows and a recent equity raise, the company successfully trimmed its net debt to 3,010 crore, which now stands at less than 0.2 times the equity. This achievement aligns with its target of maintaining a net debt-to-equity ratio of less than or equal to 0.5x.

"Continuing robustness in business fundamentals and strengthening of the balance sheet has led to further credit rating upgrade to ‘AA- (Stable)’ by ICRA," the company said in its regulatory filing dated April 05. 

Also Read: Puravankara: After 235% gains in last 1 year, Yes Securities sees another 86% upside in this realty stock; here's why

Last month, the company raised 3,300 crore by selling shares to institutional investors. The QIP was subscribed nearly three times within 5 hours of issue opening and witnessed traction from a diversified set of investors, including sovereign funds, pension funds, and insurers.

This marks the fourth equity raise by Lodha in the last 36 months, bringing the total capital raised to over 13,000 crore.

Also Read: Office Vacancy Rate Nears 20% to Set Fresh Record, Moody’s Says

Promising outlook

India's rapid economic growth positions it as one of the fastest-growing economies globally, projected to transition from a low-income economy to a mid-income one by the end of the decade. This trajectory fuels the demand for the housing market within the country. 

Factors such as urbanisation, lifestyle changes, and the expanding affluent class contribute to this robust demand.

Moreover, government initiatives and substantial investments from high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) in the Indian residential market are expected to further drive this demand.

"We see all the structural factors are in place for significant growth in volumes and are in only the fourth year of a multi-decade-long housing cycle. With this capital raise, our balance sheet is exceptionally well placed and will allow us to improve profitability, while we continue to deliver on our growth outlook," the company said.



Disclaimer: We advise investors to check with certified experts before making any investment decisions.

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Published: 12 Apr 2024, 11:47 AM IST
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