Macrotech Developers Gets Positive Outlook From Brokerages On Strong 2QFY25 Performance

Jefferies, Nomura and Nuvama all remain positive on Macrotech Developers Ltd. as the company reported strong 2QFY25 update on October 4. The company reported sale bookings at Rs 4,290 crore for the quarter, reflecting a 21% year-over-year increase and a 6% quarter-over-quarter rise. This marks the best quarterly pre-sales performance in the company's history.

Jefferies in its note for 'India Property' retained Macrotech as its preferred picks. The brokerage believes Lodha (MDL's parent brand) achieved 48% of pre-sales annual guidance in H1FY25.

The brokerage also noted that Macrotech's results were in line to achieve 20% pre-sales growth guidance in financial year 2025.

Overall, market conditions remain healthy despite the slowdown observed in Q2, and sales momentum is expected to increase as festive season launches commence, the firm noted.

Nomura's Global Markets Research expressed a positive outlook on Macrotech, noting the company’s granular sales approach and its successful execution of a 'supermarket' strategy to maximise potential in specific micro markets. They highlighted the township business in the eastern suburbs of Palava and Thane, anticipating growth driven by infrastructure upgrades and premiumisation strategies.

The brokerage noted, "The company continues to see a strong pipeline of business development opportunities for its residential business. As highlighted in our previous note, the company has ample capacity to exceed its business development goals owing to its strong OCF generation and low net debt."

Overall, Macrotech Developers demonstrated strong operational performance in a period when industry reports indicate weaker sales in the real estate market. The management acknowledges that while growth may not be as robust as during 2021-23, it expects the market to remain resilient moving forward. Currently, there are no signs of a major slowdown, the note stated.

Nomura maintained a positive outlook on Macrotech Developers as the company has significant potential to surpass its business development goals, supported by strong operating cash flow and relatively low net debt.

Nomura has reiterated its ‘BUY’ rating on Macrotech Developers Ltd. Macrotech's pre-sales results come in the context of a festive season that is expected to bolster sales further. The company has already achieved approximately 48% of its FY25 pre-sales guidance in just the first half of the fiscal year. With continued positive market sentiment, Macrotech is on track to meet its full-year pre-sales target, reflecting a projected 20% year-over-year growth, the firm noted.

In its outlook for the company the firm noted, "RERA-driven consolidation is throwing up growth opportunities for organised players such as Lodha (refer: Burning bright; hope for more). A revival in housing demand, Lodha’s leadership in the MMR, which is registering healthy sales, robust business development and ready inventory liquidation are likely to culminate in robust cash flows. Faster land monetisation at Palava, portfolio growth and geographical diversification can be potential stock catalysts."

The scrip rose as much as 4.16% to Rs 1,222 apiece. It pared gains to trade 3.19% higher at Rs 1,210.70 apiece, as of 10:53 a.m.

It has risen 55.78% in the last 12 months. Total traded volume so far in the day stood at 3.3 times its 30-day average. The relative strength index was at 41.

Out of 19 analysts tracking the company, 11 maintain a 'buy' rating, three recommend a 'hold,' and five suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 17.6%.