LODHA - Macrotech Devel.

📊 NSE: LODHA 🏢 Construction 📅 Last Updated: 12/14/2025 9:24

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations for Q2 FY26 reached INR 3,800 Cr, representing a significant 45% YoY growth. While construction of residential and commercial projects currently accounts for 100% of turnover, the company is aggressively building annuity streams in logistics and warehousing, where it is developing 5.3 Mn sq. ft. to diversify income.

Geographic Revenue Split

The Mumbai Metropolitan Region (MMR) remains the primary contributor, offering margins approximately 10% higher than other regions. The company is expanding its footprint with Pune now being the second-largest market, alongside active projects in Bengaluru and a planned pilot in the National Capital Region (NCR) for 2026 to de-risk geographic concentration.

Profitability Margins

Profit After Tax (PAT) margin improved significantly to 20% in FY25 from 14.9% in FY24. This was driven by a 45% increase in operating income to INR 13,791 Cr and a 80% surge in PAT to INR 2,767 Cr, reflecting high operational leverage and premium pricing power.

EBITDA Margin

Adjusted EBITDA for Q2 FY26 was INR 1,300 Cr, up 37% YoY, with an EBITDA margin of 34.4%. This margin remains robust due to the company's ability to command premium pricing and maintain steady sales and marketing costs as a percentage of total sales.

Capital Expenditure

The company has a robust business development pipeline, having achieved its full-year guidance of INR 25,000 Cr in GDV (Gross Development Value) additions within H1 FY26 alone. Significant capital is being deployed into the annuity portfolio, including warehousing and digital infrastructure (data centers).

Credit Rating & Borrowing

Lodha maintains a strong credit profile with an [ICRA]AA (Stable) and CRISIL AA/Stable rating. The average cost of debt has been reduced by ~30 bps QoQ to 8.0%, supported by a low net debt-to-equity ratio of 0.25x, well below the internal ceiling of 0.5x.

⚙️ Operational Drivers

Raw Materials

Key construction materials include steel, cement, and finishing materials. While specific percentage splits per material are not disclosed, construction costs are the primary variable in the 'Embedded EBITDA' calculation, which includes a built-in contingency to manage price volatility.

Import Sources

Sourcing is primarily domestic within India to support projects in MMR, Pune, and Bengaluru, leveraging local supply chains to maintain the pace of construction across 3.9 msf of new launches.

Key Suppliers

Not specifically named in the provided documents, but the company utilizes 50% of its 5,359-strong workforce for in-house execution and design to reduce dependency on external contractors and improve quality control.

Capacity Expansion

Current execution capacity has delivered over 100 million sq. ft. since inception. In Q2 FY26, the company launched 3.9 msf with a GDV of INR 4,900 Cr. It aims to become the largest developer in Pune within 2 years, up from its current #2 position.

Raw Material Costs

Construction costs are managed through in-house execution capabilities, which the company claims reduces costs and allows for better management of the construction pace. These costs are the only projected element in their margin calculations, with other costs like land and approvals being fixed.

Manufacturing Efficiency

Efficiency is tracked through handover metrics; the company achieved 1,396 unit handovers in Q2 FY26. In-house execution allows for a 10% margin premium in core markets like Mumbai.

Logistics & Distribution

Logistics operations are centered at Palava, which hosts one of MMR’s largest warehousing ecosystems, featuring clients like Skechers, DP World, and FM Logistics.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth will be achieved through a 20% annual pre-sales growth target and a 20% RoE. Key pillars include expansion into the NCR market (pilot in 2026), increasing market share in Pune and Bengaluru, and scaling the annuity business (warehousing and data centers) to provide stable cash flows.

Products & Services

Residential apartments (luxury and premium), commercial office spaces, warehousing boxes, industrial plots, and digital infrastructure (data centers).

Brand Portfolio

Lodha, Palava, Upper Thane, One Lodha Place, Lodha Developers.

New Products/Services

Expansion into 'Powered Shell' infrastructure for AI-driven data centers and a digital layer for facilities management, offering home improvement and real estate services to a captive base of 70,000 households.

Market Expansion

Targeting the NCR region for a pilot launch in 2026 and aiming for the #1 position in the Pune market within the next 24 months.

Market Share & Ranking

Ranked as the 2nd largest developer in Pune; aiming to be #1. Recognized as the only Indian real estate company in Newsweek’s 'World’s Most Trustworthy Companies' list.

Strategic Alliances

Partnerships in the logistics sector include collaborations with DP World, FM Logistics, and Skechers for warehousing operations.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward organized, branded developers and a growing demand for sustainable, ESG-compliant housing. Lodha is positioned as a leader in this shift, retaining an 'A' rating from MSCI ESG.

Competitive Landscape

Competes with major national developers in Pune, Bengaluru, and MMR. Lodha differentiates through premium positioning and integrated township offerings.

Competitive Moat

The moat is built on a strong brand (20% referral/repeat sales), massive land banks in townships like Palava, and superior in-house execution. These advantages are sustainable due to the high entry barriers for large-scale township development.

Macro Economic Sensitivity

Highly sensitive to interest rate cycles and urban GDP growth. The company’s strategy to target a per capita income growth towards US$15,000+ aligns with India's progression toward a developed nation status.

Consumer Behavior

Increasing preference for 'Lodha Living' which integrates high-quality design with digital-enabled facility management and community services.

Geopolitical Risks

Minimal direct exposure as operations are India-centric; however, global supply chain disruptions could impact the cost of specialized construction equipment or materials.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by RERA (Real Estate Regulatory Authority) and local municipal building norms. The company maintains a robust internal financial control system to ensure compliance across its subsidiaries.

Environmental Compliance

High commitment to ESG; ranked in the Top 10 globally by S&P Global CSA 2025. The promoter family has dedicated 1/5th of the company's equity (approx. INR 20,000 Cr) to the Lodha Foundation for societal progress.

Taxation Policy Impact

The company reported a PAT of INR 2,767 Cr on an operating income of INR 13,791 Cr for FY25, reflecting standard corporate tax applications for Indian real estate entities.

⚠️ Risk Analysis

Key Uncertainties

Key risks include a potential slowdown in the residential market due to macro-economic factors and execution risks in new geographies like NCR. Impact could be a deviation from the 20% growth guidance.

Geographic Concentration Risk

High concentration in MMR, though this is being mitigated by expansion into Pune (now #2 market) and Bengaluru.

Third Party Dependencies

Low dependency on third-party contractors due to 50% of the workforce being dedicated to in-house construction and design.

Technology Obsolescence Risk

The company is proactively addressing digital shifts by adding a 'digital layer' to its facilities management and entering the data center infrastructure market.