Lodha Developers Ltd. · NSE:LODHA
Lodha Developers — Macrotech Developers Limited (Lodha) — Q1 FY2023 Earnings Presentation
52 slides from Lodha Developers's earnings presentation, Jul 25, 2022
Slide 1: Lodha – Investor Presentation cover letter
— = LODHA Dt az mum «| BUILDING A BETTER LIFE July 25, 2022 The Listing Dept., The Listing Dept. BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Exchange Plaza, C-1, Block G Phiroze Jeejeebhoy Towers Bandra Kurla Complex Dalal Street Bandra (E), Mumbai — 400 05
Slide 2: Investor Presentation First Quarter FY2023
Investor Presentation First Quarter FY2023 25th July 2022
Slide 3: Index
INDEX Page No Highlights 4 Performance Update 21 Financials 24 Company Overview 30 Annexure 38 2
Slide 4: Lodha – India's leading real estate developer
Lodha – India’s leading real estate developer Leading Residential Platform Strong Financial Profile Multiple Growth Drivers India’s Largest Real Estate Developer^ Strong profitability track record; to further Working towards predictable growth of expand due to scale up, price growth & 20%+ p.a. in p
Slide 5: Highlights
World Tower – Ball Room 01 Highlights 44
Slide 6: KPIs to assess performance of housing business
4 KPIs to asses performance of housing business INR 2,814 crores, 194% YoY, best ever 1Q performance Pre-sales Delivered 75% of growth in Q1 itself (INR 1,857 crores out of INR ~2,500 crores of growth required to meet INR 11,500 crores FY23 pre-sales target) Operating INR 1,351 crores Cashflow
Slide 7: Operating performance at a glance
Operating performance at a glance Pre-sales Collections Sales-mix 65% INR 2,814 crores INR 2,616 crores Of sales from affordable 194% yoy 53% yoy and mid-income projects Price Growth Launches Net Debt 1.7% 2.7 msf INR 8,856 crores Average price growth INR 444 crores reduction Launches across MMR qoq
Slide 8: 1QFY23 Performance
1QFY23 Performance INR Cr For Sale Others* 2,814 2,676 2,426 67% Pre-Sales Revenue 1,605 195% 957 821 0.7 msf 2.2 msf 1Q FY22 1Q FY23 1Q FY22 1Q FY23 2,616 903 1,714 53% 538 68% Collections Adj. EBITDA 33.5% 33.7% 1QFY22 1QFY23 1Q FY22 1Q FY23 13% msf 355 1.2 ~3x 2.1x 7% Completions PAT 0.4 122 271
Slide 9: Guidance for FY23
Guidance for FY23 INR cr FY22 FY23 Guidance % growth 1Q FY23 Pre-Sales 9,024 11,500 27% 2,814 For Sale 8,443 10,500 24% 2,426 Others* 581 1,000 72% 389 Operating Cashflow 3,950 ~ 6,000 ~ 50% 1,351 New Project Additions 14,600 ~15,000 6,200 Net Debt 9,309 ~ 6,000 8,856 Delivered 75% of growth require
Slide 10: New launches in 1QFY23
New launches in 1QFY23 Own/ JDA Est. GDV Micro-market Area (Mn .Sq.ft) Est. OC Remarks Project (INR cr) South Central Own 0.2 3,000 FY25 Lodha Malabar South Central Own 0.5 990 FY26 NCP – Aura Extended Eastern Suburbs Own 0.7 470 FY25 Premier / Palava Extended Eastern Suburbs Own 0.5 300 FY25 Upper
Slide 11: New launches for the rest of FY23
New launches for the rest of FY23 Own/ JDA Est. GDV (INR Micro-market Area (Mn .Sq.ft) No of Projects Project cr) South Central JDA 1.4 4,380 3 South Central Own 0.3 950 1 Extended Eastern Suburbs Own 2.6 1,580 1 Eastern Suburbs JDA 0.8 1,400 2 Western Suburbs JDA 0.8 1,020 2 Pune JDA 1.4 1,000 2 Pu
Slide 12: New Projects: Added three JDA projects in 1QFY23
New Projects: Added three JDA projects in 1QFY23 INR Cr Launched/ Saleable Area Lodha’s Commercial Micro-market Est. GDV Est. (msf) interest Launch Signed in FY22 8.8 14,600 Already Launched 2.3 2,750 New Additions MMR - South Central 0.5 2,400 50% of Revenue FY23 Pune – South West 3.3 2,600 75% of
Slide 13: Entered Bangalore housing market
Entered Bangalore housing market… Market size: INR ~40,000 crores Micro-market Market Size (INR cr) 1 South 18,500 2 East 8,000 3 North 11,200 4 West 2,000 5 Central 300 Total 40,000 Source: Knight Frank, Industry 12
Slide 14: Strategic choice to ensure brand presence in Bangalore
…strategic choice to ensure brand presence in market with good long-term prospects Key reasons for entering the market o Fragmented market with Top 5 players accounting for ~30% market share o Market with steady sales o Core hub for Technology in India Signed first project through JDA with devel
Slide 15: Interest rate hike – Mitigation plan in place
Interest rate hike – Mitigation plan in place Previous interest rate hike cycle: Absorption growth remains robust until ~175 bps of rate hike Housing demand not sensitive to modest 9.0 8.50 200 8.0 180 increase in interest rate 7.0 160 6.0 140 5.0 6.75 120 After first 12-24 months from home purc
Slide 16: Commodity inflation moderating
Commodity inflation moderating Prices of key commodities % Change Jun-22 over Commodity Mar-21 Mar-22 Jun-22 Mar-22 Steel (ex-works) (INR/tn) 47,500 66,800 54,800 -18.0% Bulk Cement (ex-GST) /50kg 270 325 350 7.7% Copper (USD/lbs) 4.00 4.75 3.71 -21.8% Aluminum (USD/T) 2,194 3,551 2,445 -31.1% Const
Slide 17: UK Investments
UK Investments Pre-sales of £ ~81mn in 1QFY23 (GSQ: £73mn, LSQ: £8mn) UK project net debt at £73 million on GSQ, entirely covered by balance collections of sold units USD bond partially (USD 170mn out of USD 225mn) pre-paid in Mar-22 from the GSQ sales proceeds; Balance USD 55mn to be pre-paid
Slide 18: Dividend Policy
Dividend Policy Intend to pay 15%-20% of Consolidated PAT as dividend starting for the year FY23, subject to: o Net debt threshold of 1x Operating Cash Flow and any other leverage ratio as decided by the board o Investment needs to tie-up land through JDA or on out right basis in our target micro-
Slide 19: Digital Infrastructure: potential for recurring annuity income
Digital Infrastructure: potential to generate significant recurring/ annuity income Digital Infrastructure Platform o Platform to invest > USD 1 billion to create pan-India presence in warehousing and light industrial parks o Lodha to be operating partner and inject assets into the platform; first
Slide 20: Commercial Rental Assets
Commercial Rental Assets One Lodha Place iThink Thane iThink Palava Palava Mall Area in msf Location Worli (World Towers) Thane (Clariant Plot) Palava (Office) Xperia Mall* Leasable Area^ 0.75 0.13 0.58 0.42 OC received for 0.15: Ready Area Ready Area significant part of 0.13: Ready Area 0.43: Under
Slide 21: ESG: Our philosophy of Do Good, Do Well
ESG: Our philosophy of Do Good, Do Well Published our first Expanded Board by Established Lodha Set an internal Integrated Annual inducting Mr. Rajeev Net Zero Urban carbon price of Report FY22 Bakshi (Ex-Pepsico, Accelerator with USD40 Cadbury Schweppes) as technical support an Independent director
Slide 22: Performance Update
Palava 02 Performance Update 21
Slide 23: Micro-market performance for 1QFY23
Micro-market performance for 1QFY23 INR Cr Average Sales Construction Area delivered Micro-markets Pre-Sales Collections Price (INR psf) spends (Mn. sq. ft.) South & Central 855 34,214 911 231 - Thane 428 10,291 490 138 - Extended Eastern Suburbs 680 6,231 384 358 0.2 Western Suburbs 111 15,275 185
Slide 24: Micro-market supply overview
Micro-market supply overview Planned Inventory Launches Residual Collections Ready Ongoing In next 12 months^ Beyond 12 months Land Micro-markets from Sold unsold unsold Bank# JDA JDA units Own Land Own Land Projects Projects INR Cr Mn. Sq. ft. Acres South & Central 2,104 3,783 6,633 0.3 1.4 1.1 1.1
Slide 25: Financials
Lodha Amara – Club House 03 Financials 24
Slide 26: Financial highlights for 1Q FY23
Financial highlights for 1Q FY23 INR Cr INR Cr 1Q FY23 1Q FY22 Growth % FY22 Revenue 2,676 1,605 66.7% 9,233 Adj. EBITDA^ 903 538 67.7% 3,243 Adj. EBITDA (%) 33.7% 33.5% 20bps 35.1% PAT (ex. Forex & Exceptional 355 122 2.9x 1,262 Items) PAT (%) (ex. Forex & 12.8% 7.1% 570bps 13.2% Exceptional Items)
Slide 27: Consolidated Summary Balance Sheet
Consolidated Summary Balance Sheet INR Cr As at As at As at As at ASSETS EQUITY AND LIABLITIES 30-Jun-22 31-Mar-22 30-Jun-22 31-Mar-22 Equity Share Capital 482 482 Tangible Assets 1,393 1,384 Other Equity 11,906 11,624 Intangible Assets 537 539 Non-Controlling Interests 64 57 Investments 269 574 Tot
Slide 28: Cash Flow – 1Q FY23
Cash Flow – 1Q FY23 INR Cr Office & Retail Residential Industrial Other Land Total (for rent) Pre-Sales 2,426 42 297 49 2,814 Collections 2,207 75 272 62 2,616 Net* Collections 2,006 75 272 62 2,415 Op. Expenses 1,076 9 3 -- 1,064 -Const. Exp 845 8 3 -- 857 -SG&A 230 1 0 -- 232 -Taxes -24 Cash flow
Slide 29: Significant progress towards the targeted capital structure
Significant progress towards the targeted capital structure INR Cr Trend for Net Debt for India business Cost of borrowing continues to reduce 12.3% 16,076 10.5% 9,300 444 10.1% 8,856 Mar-21 Mar-22 Reduction in Jun-22 Mar-21 Mar-22 Jun-22* 1QFY23 *Average exit cost of debt as of 30st Jun 2022 28
Slide 30: Market wise completion plan for ongoing for sale projects
Market wise completion plan for ongoing ‘for sale’ projects Mn.sq ft. Revenue New sales from Sales from under- Sale of Sale of recognition for ready unsold construction project annuity Land the period Inventory obtaining OC during assets the period FY25 FY26 Total area under Sold/ Business FY23 FY24
Slide 31: Company Overview
Palava 04 Company Overview 3030
Slide 32: Investing for the next phase of growth
Investing for the next phase of growth Three focus areas- Technology, People and ESG Technology Undergoing a Tech. Transformation to achieve operational improvement, revenue growth, superior customer & employee experience Roadmap to ensure high value solutions be implemented at the earliest; Ini
Slide 33: Eminent Board of Directors
Eminent Board of Directors Mukund Chitale, Independent Director and Chairman Director on the Board of L&T Former President of ICAI Former Chairman of Ethics Committee of BSE Rajinder Pal Singh, Non-Executive Director Director on the Board of Maruti Suzuki Former Chairman and Managing Direc
Slide 34: Strong management team
Strong management team Shaishav Dharia Deepak Chitnis Sushil Kumar Modi CEO – Townships, Director – Digital Chief Designer Infra Chief Financial Officer Previously served as senior architect Formerly worked with McKinsey & Formerly worked at GMR, Aditya Excellent domain knowledge 24+ 27+ at Ob
Slide 35: Our ESG Philosophy: Do Good, Do Well
Our ESG Philosophy: Do Good, Do Well Climate Resilience: Be resilient to climate change while not contributing to global warming Ensure sustainability in our core operations by positively impacting the natural environment. Not to contribute Achieve Carbon Neutrality in operations by the year 2035 or
Slide 36: Strategy to achieve the overarching ESG Goals
Strategy to achieve the overarching ESG Goals Environmental Strategy Social Strategy Purpose Goal Impact on Communities Action area 35
Slide 37: Progress made in Environmental Sustainability
Progress made in Environmental Sustainability Overarching Achieve Carbon Neutrality in operations (Scope1, 2) by the year 2035 or earlier Goals Align Scope 3 emissions reduction roadmap with 1.5 ℃ ambition Be resilient to climate change while not contributing to global warming Launched “Lodha Net Ze
Slide 38: Progress made in Social and Governance dimensions
Progress made in Social and Governance dimensions Governance Social Board Our People Communities Expanded Board and inducted as Diversity & Inclusion (44% Women by FY27) Livelihood Independent Directors: Women represent 26%* of employee strength as Computer & vocational courses conducted for • Mr. R
Slide 39: Annexure
ESR Park 05 Annexure 38
Slide 40: Significant positivity on sector from key stake holders
Significant positivity on sector from key stake holders “Real estate is coming back and there is wealth effect coming from that”: V. Anantha Nageswaran, CEA to Government of India (Link) “Real estate in India is on an upcycle. Developers are now financially stronger and more disciplined”: Deepak
Slide 41: Industry at start of upcycle with increasing share for Tier 1 players
Urban housing in India’s Tier 1 cities: set for a sustained up-cycle Real Estate sector on course to become a USD 1 trillion market* Industry at start of upcycle with increasing share for Tier 1 players like Strong Entry of large educated workforce every year Structural Rapid urbanization and fa
Slide 42: Structural strength, affordability to sustain up-cycle
Structural strength, affordability to sustain up-cycle Rapid urbanization to create need India’s population will continue to grow till 2050 Family size getting smaller for quality urban housing 1,800 India - Urbanization 1,600 Urban Household size 60 1,400 5.6 1,200 50 1,000 5.2 40 800 600 4.8 30 40
Slide 43: Multiple benefits of consistent housing price increase below wage growth
Multiple benefits of consistent housing price increase below wage growth Improves affordability leading to increased volumes Leads to significant wealth creation for home owning middle class (‘Wealth Effect’) o Boosts consumption as consumer confidence increases o Housing is a vehicle for genera
Slide 44: Significant room for growth in housing volumes
Significant room for growth in housing volumes 52,719 89% 31,080 >150x 68% Mortgage value per capita (US$) 38,116 27,720 22,661 52% 15,795 3,942 44% 45% 39% 2,109 34% 1,560 235 20% 18% 11% India USA Germany Malaysia UK China Singapore Netherlands Thailand Japan Mortgage as % of GDP As India moves fr
Slide 45: Construction cost – moderation since Mar-22
Construction cost – moderation since Mar-22 Mar’22 to Jun’22 % Change over Mar’21 Commodity/Component % Share in total cost to Mar’22 Weighed % Change Impact Steel 12.9% 35.1% -19.1% -2.5% Flooring Tiles 5.0% 23.9% -2.0% -0.1% Electrical/Plumbing 11.8% 10.1% -3.2% -0.4% Labour 34.4% 3.0% 1.3% 0.4% E
Slide 46: Significant opportunity to scale up in other micro-markets of MMR
Significant opportunity to scale up in other micro-markets of MMR Market leading position in most micro-markets, with potential for growth in other regions Market share by absorption in INR bn 4. Thane 1. Extended Western Suburbs Vasai Developer Market share (%) Developer Market share (%) Naigaon 1
Slide 47: Pune - fourth largest housing market of India
Pune - fourth largest housing market of India Market size: INR ~36,500cr Micro-market Market Size (INR cr) 1 Central 1,000 2 North-East 7,500 3 South-East 4,000 4 South-West 5,500 5 North-West 10,000 6 Pimpri-Chinchwad 8,500 Total 36,500 Source: CRE Matrix 46
Slide 48: Pune will contribute to growth in a sustainable manner
…will contribute to growth in a sustainable manner Large & resilient market with a play on IT and manufacturing sector upswing Historically, we have only present through Lodha Belmondo in Pune (Pimpri-Chinchwad) Launched first project within the city, off NIBM Road (South-East) in Aug’21, sold
Slide 49: Key affordable & mid-income projects delivered
Key affordable & mid-income projects delivered Unique ability to create destinations Lodha Upper Thane Lodha Belmondo Lodha Splendora Lodha Amara Lodha Palava 48
Slide 50: Key premium & luxury projects delivered
Key premium & luxury projects delivered Unique ability to create destinations New Cuffe Parade Lodha Altamount World Towers Lodha Park 49
Slide 51: Disclaimer
Disclaimer Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, technological risks, and many other factors that could cause our actual
Slide 52: Thank You!
Thank You! For any further information, please write to investor.relations@lodhagroup.com 51
Macrotech Developers Limited (Lodha) — Q1 FY2023 Earnings Presentation on 6ix