Macrotech Developers Ltd, under the Lodha brand, saw its net debt rise by 43.5% to INR 4,320 crore in Q1 FY 2024-25, due to increased investment in land acquisition and construction. Despite this, the debt remains manageable at 0.24 times equity. The company's CEO, Abhishek Lodha, highlighted strong cash flows and reduced funding costs. Macrotech achieved a 20% growth in sale bookings, reaching INR 4,030 crore, with customer collections up by 12%. The firm reported a 2.7-fold increase in net profit to INR 475.3 crore and continues to expand its real estate footprint, particularly in Mumbai and Pune.
Macrotech Developers Ltd, a prominent real estate firm based in Mumbai and operating under the Lodha brand, experienced a notable rise in its net debt during the first quarter of the current fiscal year. The company's net debt increased by 43.5% to INR 4,320 crore as of 30 June 2024, up from INR 3,010 crore at the close of the March quarter of 2023-24. This increase is attributed to heightened investments in land acquisition and construction activities, reflecting the company's strategy for growth. According to Macrotech Developers latest investor presentation, the net debt of INR 4,320 crore equates to 0.24 times the company's equity, which remains comfortably below the ceiling of 0.5 times equity. The company acknowledged that its investment in growth initiatives was a primary factor contributing to the increase in net debt.
During discussions with analysts, Macrotech Developers Managing Director and CEO, Abhishek Lodha, emphasised that despite the significant level of business development and a marked increase in construction expenditure during the quarter, the company's net debt remained manageable at INR 4,300 crore, representing 0.24 times its equity. Lodha remarked that this was an example of the fact that their business delivered strong underlying cash flows, and as they continued to ramp up their investment in construction, they would see in the second half of the year a significant acceleration in the free cash flow generation and operating cash flow generation for the company.
Lodha further highlighted that the company has successfully reduced its average cost of funds by approximately 30 basis points, bringing it down to around 9.1%. On the operational front, Macrotech Developers demonstrated strong performance with a 20% growth in sale bookings, reaching INR 4,030 crore in the first quarter of this fiscal year, driven by strong demand in the housing sector. This marks a notable increase from INR 3,350 crore in the same quarter of the previous year.
Customer collections also saw an upward trend, with a 12% rise to INR 2,690 crore in the April-June period of 2024-25, compared to INR 2,400 crore during the corresponding period of the previous year. In the previous fiscal year (2023-24), Macrotech Developers reported a 20% growth in sale bookings (pre-sales), achieving a record INR 14,520 crore, up from INR 12,060 crore in the prior year. For the current fiscal year, the company has set an ambitious target, aiming for a 21% increase in sale bookings, which would amount to INR 17,500 crore.
Recently, the company also reported a significant 2.7-fold increase in its consolidated net profit, which surged to INR 475.3 crore for the June 2024 quarter, driven by higher income. This is a significant improvement from the INR 178.4 crore net profit recorded in the same period of the previous year. During the April-June period of this fiscal, Macrotech Developers' total income rose to INR 2,918.3 crore, a substantial increase from INR 1,671.8 crore in the corresponding quarter of the previous year.
Macrotech Developers has established a strong presence in the Mumbai Metropolitan Region (MMR) and Pune and has recently expanded into the Bengaluru property market. The company has delivered approximately 100 million square feet of real estate to date and is currently developing more than 110 million square feet across its ongoing and planned projects.
In summary, Macrotech Developers Ltd has reported a solid performance in the recent quarter, with strong growth in sale bookings, customer collections, and a significant surge in profitability. Despite a notable increase in net debt due to heightened investments in growth initiatives, the company's debt levels remain comfortably within manageable limits. Macrotech's strategic expansion into new markets, coupled with its strong presence in key regions, positions the company well for continued growth and value creation for its stakeholders.
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