Macrotech Developers Q1 Results Review - Progress On Annuity Stream Build-Up Key For Rerating: Dolat Capital

Dolat Capital Report

Macrotech Developers Ltd. clocked its best Q1 presales of Rs 33.5 billion; up 19% YoY and 11% QoQ. New project additions during the quarter stood at Rs 120 billion (~Rs 100 billion in Alibaug – a second home luxury market); achieving 60% / 70% of FY23 actual / FY24 guidance respectively.

This aids the existing launch pipeline for FY24 of Rs 126 billion.

Investments in new business development remained within guidance at ~5% of gross development value offsetting core free cash flow (excluding growth capex) of Rs 6.4 billion and resulting in net debt increasing 3% QoQ.

Guidance is for net debt reducing hereon with leverage target of below one time operating cash flow intact. A well-diversified sizeable ready inventory of Rs 86 billion is set to aid both leverage targets and 20% presales growth for FY24.

We raise our March-24 target price to Rs 750 as we reset the scale and average pricing higher for new BD – implied price realisation in Q1 up 19% versus FY23 and set to increase further with the addition of high value Juhu (MMR- Western suburbs) project.

Also, we lift our annual price escalation by 1-2% for both ongoing projects and landbank.

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