By Varun Singh
Lodha Group, one of India’s largest real estate developer, announced its financial results for the quarter ended September 30, 2021.
The company’s performance showed a strong rebound in what is otherwise a weak quarter, on account of impact of monsoon in Mumbai and inauspicious ‘Pitrupaksh’ period with strong pre-sales of INR. 3,450 crores+, including INR. 2,003 crores in India and £145 million in UK.
From India operations, adjusted EBITDA was INR 778 crores (up 5x YoY) and PAT (excluding forex) was INR 287 crores.
Operational & Financial Overview for the 2QFY22
• Total pre-sales of ~INR 3,450 crores: India Pre-sales at INR 2,003 crores (up 88% YoY) and UK pre-sales at £145 million
• Collections at INR 1,912crores (up 73% YoY)
• Revenues from operations at INR 2,124 crores (up 136% YoY)
• Adjusted EBITDA at INR 778 crores (up 5x YoY)
• Strong Adjusted EBITDA margin at 37%
• PAT (excluding forex) stood at INR 287 crores (vs. INR 62** crores YoY)
Commenting on the performance during Q2FY22, Abhishek Lodha, MD & CEO, Macrotech Developers Ltd. said, “Housing market in the last 9 months has gone from strength to strength. While at the beginning of the year we were quite optimistic about the underlying growth and opportunities available, even we have been pleasantly surprised by the trends on the ground that have emerged during this period. Long term potential of housing as wealth creator as well as employment generator is now being well recognized by all stake holders. Enablers for strong multi-year up-cycle in housing demand remain intact. To capture this strong growth, in a short period of time since our IPO, we have been able to add 5 JDA projects in the micromarkets of MMR and Pune where we have limited or no presence. Combined area of these JDAs is nearly 4 million square feet with an estimated GDV of ~INR 4,600 crores.
We have not only signed these JDAs but have also launched 3 of them so far and witnessed great traction from consumers. We see very strong pipeline of new JDAs with potential to add new projects in H2 with GDV potential of ~INR 7000-10,000 crores. New launches coupled with strong underlying customer interest in housing augers well for demand as we enter the festive season. H2 as we know generally contributes 60% of the normalized sales. Thus, subject to no covid-like disruptions, we are set for ‘never-seen-before’ kind of pre-sales momentum in the H2 delivering our strongest ever sales performance.
Demand for Digital Infrastructure continues to remain strong and we see new age companies take up large amounts of space in our Digital Infrastructure parks. We are also advancing a pan-India platform with marquee international investors and this, once it crystallizes, will provide us with a second growth driver.”
Commenting further on the growth plans, Lodha added “We are being presented with significant growth opportunities, largely in form of JDAs, with high RoEs in our target markets. In order to tap this exponential growth, we are contemplating raising growth capital in the next 12 months.”
Credit rating for the company was further enhanced to A- during the quarter. Average cost of debt has come down from 12.3% at end of Mar’21 to 11.4% at Sep’21 end and will continue to follow the downward trajectory. During the quarter, net debt for the India business was largely stable and is expected to come down sharply in H2 as impact of as 2nd wave of Covid on collections wanes.
The company continues to focus on various initiatives to achieve our goals of being a leader on ESG. We have initiated the process to completely transition to Renewable Energy on Construction Sites and are targeting up to 40% Carbon Emissions reduction in next 2 years. We have also tied up with Tata Power to provide EV charging infrastructure at all our developments. The company has also registered with a leading ESG benchmark (S&P Global) and have filed for assessment. On the Covid front, company has conducted intensive Covid-19 vaccination program leading to 57,000 vaccinations to our employees and 3rd party workers, their dependents, as well as residents in Lodha developments.