Home / Markets / Stock Markets /  Edelweiss gives 'Buy' rating to this multibagger realty stock, raises target price
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Realty major Macrotech Developers (Lodha) clocked pre-sales growth of 40% on a yearly basis and 30% on a sequential basis, its best in the past twelve quarters and sustained its strong performance into Q3FY22. With the housing cycle likely turning, analysts at brokerage house Edelweiss expect the sales momentum to remain healthy going ahead. 

Factoring in the recent qualified institutional placement (QIP) and the strong pace of business development, the brokerage and research firm has maintained ‘Buy’ rating on Macrotech shares with a revised target price upwards of 1,428 per share ( 1,223 earlier). The multibagger stock has risen over 160% in a year's period.

The company's net debt for the India business declined from the previous quarter whereas added six JDA projects with GDV of around 100 billion during the quarter. Since the IPO, it has signed JDAs for eleven projects with cumulative GDV of around 145 billion.

Its new sales value grew 40% year-on-year (YoY) despite the base quarter benefiting from reduced stamp duty in Mumbai. The company has maintained its sales guidance of around 90 billion for FY22. The brokerage believes Lodha can achieve this, considering a revival in Mumbai’s housing demand aided by asset monetisation.

"Revival in housing demand, Lodha’s leadership position in MMR, robust business development performance and ready inventory liquidation are likely to culminate in robust cash flows going ahead. Faster land monetisation at Palava, portfolio growth, geographical diversification and annuity asset sale can be potential stock catalysts," Edelweiss' note added.

The Grosvenor Square project achieved pre-sales of GBP 177 million during the quarter and the company expects the project to be fully sold out well ahead of the business plan target of Q4FY24. The Lincoln Square project achieved pre-sales of GBP 14 million. Lodha expects to repay the $225 million bond in the next four months from the sale proceeds, well in advance of its scheduled maturity of March 2023.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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