#MacrotechDevelopers (#Lodha) Q3 FY22 concall highlights 🏡🏠
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1. Pre-sales were up 40% YoY - ₹2608 Cr. Highest in the last 12 quarters.
2. Affordable and mid-income segment accounted for 63% sales.
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1. Pre-sales were up 40% YoY - ₹2608 Cr. Highest in the last 12 quarters.
2. Affordable and mid-income segment accounted for 63% sales.
3. The UK pre-sales were also the best ever quarterly performance(GSQ -£177m, LSQ - £14mn ).
4. There was no major impact on construction progress from Omicron. There has been a slight deferment of sales(~₹200 Cr) which is expected to come back.
4. There was no major impact on construction progress from Omicron. There has been a slight deferment of sales(~₹200 Cr) which is expected to come back.
5. Raised ₹4000 Cr through a QIP with participation from marquee global investors. The proceeds were used to acquire new land through JD/JVA, buying out of minority interest in Palava and ₹750 Cr was used to take the benefit of 50%
rebate by paying various regulatory fees in advance. The benefit from this is estimated to be around ₹600 Cr.
6. Another benefit from this is that the regulatory costs for various projects have been frontloaded and as sales revenues start to come in, it will
6. Another benefit from this is that the regulatory costs for various projects have been frontloaded and as sales revenues start to come in, it will
mostly contribute to increasing OCF. They still have a surplus of ~₹2200 Cr left from the QIP proceeds, which will be used for growth through the capital light JDA model over next 5-6 quarters.
7. Added 11 JDA projects this financial year amounting to cumulative GDV of ~₹14,600 Cr. Of this, 6 projects were added this quarter.
They are seeing an appropriate level of price increase compared to the increase in price of construction materials.
They are seeing an appropriate level of price increase compared to the increase in price of construction materials.
Selling prices are increasing by 5% on average across all segments. It is expected to increase by 6% in the future.
8. Inflation affects their business in 2 ways - cost of materials go up and mortgage rates go up.
8. Inflation affects their business in 2 ways - cost of materials go up and mortgage rates go up.
Management does not expect much softening of demand due to increase in interest rates. The cost of materials as a percentage of sales price is the lowest in India at around 30%. So the company does not foresee any big issues with the increase of raw material cost.
9. The positive of this is that the company has a lot of finished inventory already built up. So as selling prices go up, margins are expected to increase.
10. The interest cost for Q4 is expected to be around ₹300 Cr. They are targeting ₹800 Cr interest cost for FY23.
10. The interest cost for Q4 is expected to be around ₹300 Cr. They are targeting ₹800 Cr interest cost for FY23.
11. The management has indicated the the entire UK surplus cash will be repatriated to India in next 5-6 quarters
12. The net debt has been reduced to ₹9896 Cr. The guidance for FY22 was that net debt will be below ₹10,000 Cr which has been achieved ahead of schedule.
12. The net debt has been reduced to ₹9896 Cr. The guidance for FY22 was that net debt will be below ₹10,000 Cr which has been achieved ahead of schedule.
They reduced ₹400 Cr of debt through OCF only.
13. They are seeing a lot of interest in the Palava Ecosystem from commercial players. A global sportswear player is going to be setting up their logistics hub spread over 1 mn sq ft area.
13. They are seeing a lot of interest in the Palava Ecosystem from commercial players. A global sportswear player is going to be setting up their logistics hub spread over 1 mn sq ft area.
A hospital chain is buying land to set up a 100 bed hospital. A pharma company is buying land to set up an R&D facility. They are also in talks with a marquee ecommerce player to set up a facility there.
14. They have 3 main segments - Affordable, Aspirational and Premium. They are seeing very strong growth across all segments and all geographies. Conversion rates have been the best in Affordable and Premium segments.
15. In Q3 FY22 they had 27,000 consumers come to their site in 13 weeks. That is an average of 2,000 walk-ins every week. That is an improvement of 10% YoY. The conversion rate was about 9%. This is the highest it has been in the last 20 quarters.
16. They have planned their JV/JDA in such a way that it gives them access to markets in which they currently do not have a presence in. They are not present in markets surrounding Mumbai (like Navi Mumbai). The JVs will help them access those markets.
17. They are focusing on replenishing supply in markets where inventory is sold out. In the South & Central Mumbai market, projects in Kalachowki and Near KEM Hospital are fully sold out. They are looking to replace that supply around the same price range of
about ₹23,000-₹25,000 per sq. ft
18. Due to the profit share model, as the final selling price of the unit increases the value of the land will implicitly increase as well.
18. Due to the profit share model, as the final selling price of the unit increases the value of the land will implicitly increase as well.
19. They are looking to invest in Digital Infrastructure in Palava. Land value will increase as Digital Infrastructure improves there.
20. 3 projects to be launched in South Mumbai - Walkeshwar(Malabar Hill) to be launched Q4 FY22, Tardeo expected to launch in Q2 FY23 and the Prabhadevi project is not envisaged to launch in FY23.
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