Lodha Developers Ltd. · NSE:LODHA
Lodha Developers — Macrotech Developers Limited (Lodha) — Q3 FY2024 Earnings Presentation
60 slides from Lodha Developers's earnings presentation, Jan 27, 2024
Slide 1: Cover letter to stock exchanges
January 27, 2024 BSE Limited Scrip Code: 543287 Debt Segment – 974163, 974199, 974473, 974511, 974986, 975053, 975115, 975192 National Stock Exchange of India Limited Trading Symbol: LODHA Dear Sirs, Sub: Investor Presentation We enclose herewith Investor’s presentation on the Unaudited Financial Re
Slide 2: Investor Presentation Third Quarter FY2024
Investor Presentation Third Quarter FY2024 27th January 2024
Slide 3: Index
INDEX Page No Highlights 4 Growth Drivers 10 Performance Update 24 Financials 35 Company Overview 38 Annexures 45 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 operating cash flow generation giving ability to grow & de-lever in tandem Planned consistent growth of ~20% p.a. INR ~770bn of p
Slide 5: Highlights
World Tower – Ball Room 01 Highlights 44
Slide 6: Key Performance Indicators
Key Performance Indicators Pre-sales INR 34.1bn ( 12% YoY), best ever 3rd quarter Embedded ~30% for Q3 & 9MFY24 EBITDA Margin# New Projects Three projects with INR ~60bn GDV Added 9MFY24 INR 203bn - surpassing full year guidance Highest top of mind awareness amongst housing brands in Mumba
Slide 7: Q3FY24 - Other Operating Highlights
Q3FY24 - Other Operating Highlights Price Growth Launches ~4% 3.0 msf Average YTD price growth1 Cash Flow Net Debt INR 67.5bn Operating cash flow • Debt remained stable INR 15.8bn • Avg. borrowing cost reduced by ~10bps to ~9.5% vs Sep-232 1YTD Price Growth– Weighted average of projects having sales
Slide 8: Cash Flow
Cash Flow INR bn Office & Retail ‘For Sale’ Land Sales Q3FY24 9MFY24 (for rent) Pre-Sales 31.8 0.4 2.0 34.1 103.0 Collections 24.6 0.8 0.5 25.9 77.5 Repatriation from UK Invest. 5.5 - - 5.5 5.5 *Net Collections incl. UK Repatriation 27.5 0.8 0.5 28.8 74.7 Op. Expenses 12.8 - 0.2 13.0 38.0 - Const. E
Slide 9: Guidance for FY24
Guidance for FY24 INR bn FY23 Actuals FY24 Guidance 9MFY24 Surpassed annual guidance Pre-Sales 120.7 145 103.0 Brand power attracting landowners towards MDL Operating Cashflow 56.6 ~ 60 36.7 New Project Additions 198.0 175+ 203.0 Below ceiling of 1x Net Net Debt 70.7 Debt:OCF & 0.5x Net 67.5 Debt:Eq
Slide 10: Strong launch pipeline for Q4FY24
Strong launch pipeline for Q4FY24 Own/ JDA Est. GDV (INR Micro-market Area (Mn .Sq.ft) No of Projects Project bn) South Central JDA 0.5 24.1 1 Extended Eastern Suburbs Own 1.0 6.5 2 Eastern Suburbs JDA 0.4 5.9 1 Western Suburbs JDA 0.5 10.2 2 Pune JDA 0.8 5.8 3 Thane Own 0.3 3.0 1 Bangalore JDA 1.0
Slide 11: Growth Drivers
Palava 02 Growth Drivers 1010
Slide 12: Real Estate to grow ~2x faster than the Indian economy
Long-term growth opportunity: Real Estate to grow ~2x faster than the Indian economy GDP Growth USD ~3tn USD ~7-8tn ~2.5x FY22 FY31 FY22-31 Doubling of Real Estate Contribution 6-7% 13-15% to GDP FY22 FY31 contribution FY22-31 ~5x Real Estate Industry Size USD 200bn USD ~1tn FY22 FY31 (20% CAGR) FY2
Slide 13: 100 mn new households to become home ownership capable
100 mn new households to become ‘home ownership capable’ this decade Annual 2021 2030 Per capital income seen rising HH HH GDP: USD 3tn GDP: USD 7-8tn Income Category ~2.5x over FY20-32 HH: 296mn HH: 386mn (INR mn) >2.8 High Per Capital Income (USD) 9mn 23mn (6%) (3%) 6,000 68mn 5,000 4,819 0.5-2.8
Slide 14: Strong affordability drives conversion of housing need to demand
Strong affordability drives conversion of housing need to demand Rapid urbanization to create need for quality urban housing Family nuclearization India – Urbanization (%) Urban Household size 5.6 60 50 5.2 40 4.8 30 20 4.4 10 0 4.0 1981 1991 2001 2011 2026E 2021E 1950 1960 1970 1980 1990 2000 2010
Slide 15: Other industry tailwinds
Other industry tailwinds Consolidating supply unlikely to keep pace with accelerating demand, creating lot of opportunities for Tier-1 developers o Assuming 15% supply CAGR, total production during decade to be 8-9 million units vs. demand of ~100 million units o Consolidation wave due to policy r
Slide 16: '20:20' Action Plan
‘20:20’ Action Plan INR bn Focus to deliver ~20% Pre-sales CAGR & 20% RoE with net debt ceiling of 0.5x D/E and 1x D/OCF ~210 ~20% ~20 % CAGR ~300bps 121 ~17% FY23 FY26 FY23 FY24 Pre-Sales RoE 15
Slide 17: Significant headroom for growth in MMR & Pune
Significant headroom for growth in core markets of MMR & Pune INR bn MMR Pune Bangalore Market share by ~20% ~15% ~15% decade end ~1,500 ~500 ~600 ~10 % ~10 % ~10 % CAGR CAGR CAGR ~1,000 ~350 ~400 Market Size FY22 FY26 FY22 FY26 FY22 FY26 10+% market Likely market share share ~15% ~8% ~2% by FY26 FY
Slide 18: Township growth set for a significant leap
Township growth set for a significant leap INR bn Two large township projects at Palava & Upper Highest ever Pre-sales in FY23 Thane with land already paid for – 4300+ 2x 23 acres of surplus land 19 Annuity like cashflow with ~50% cash margin 11 Multiple asset classes – FY21 FY22 FY23 o High q
Slide 19: Infra projects to supercharge Palava's growth
Ongoing infra projects (Airport, Metro, Bullet Train etc.) to supercharge Palavas’ growth…on the lines of Gurgaon Virar Extended Eastern Mumbai – Ahmedabad Suburbs High-Speed Rail (CY28) Virar – Alibaug Multimodal 1st station after BKC at Palava, Extended Western Corridor (CY30) travel time -15mins
Slide 20: Land prices have risen substantially over 2021-23
Land prices have risen substantially over 2021-23…housing prices to follow suit Land transactions happening at 2.5x in three years 6.5 5.0 2.9 2.6 Lodha Morgan Stanley JV Lodha GDIP Coldchain Logistic Co. Specialty Petroleum Product Manufacturer 2021 2022 2023 2023 19
Slide 21: Building annuity income portfolio
Building annuity income portfolio Pan-India warehousing & industrial park platform Digital Targeting 25 msf area; 5.7 msf Area Infrastructure under development (Dec-23) Growing facilities management business Have a captive base of 60,000 households with high spending power; to grow to 250,00
Slide 22: Digital Infra: potential for significant recurring income
Digital Infra.: potential to generate significant recurring income Significant traction from marquee users for leasing at our DI Park Skechers & Schlumberger facilities generating rent from 3QFY24 Pursuing land acquisition in NCR, Maharashtra & Bengaluru for the platform Strong demand from e
Slide 23: Recurring cash-flow through land monetization
Recurring Cash-flow generation through land monetization Signed definitive agreement with NewCold, one of the largest automated warehouse & cold chain logistics companies globally, for land sale at Palava for INR 1.5bn Sold land to Panama Petrochem, a leading manufacturer of specialty petroleum
Slide 24: Commercial & retail assets with rent potential
Commercial & retail assets with rent potential of INR ~2.0 bn p.a. One Lodha Place iThink Palava Palava Mall Area in msf Location Worli (World Towers) Palava (Office) Xperia Mall Leasable area 0.50 0.58 0.42 Area Leased 0.22 0.15 0.39 Operating Status Ready 0.43: Under development Annualized Rental
Slide 25: Performance Update
Upper Thane 03 Performance Update 24
Slide 26: Operational Performance
Operational Performance INR bn For Sale Others* 103.0 90.4 14% 34.1 30.3 12% 98.4 83.2 29.7 31.8 Pre-Sales 2.5 msf 2.6 msf 6.9 msf 7.7 msf Q3FY23 Q3FY24 9MFY23 9MFY24 77.4 26.8 1% 25.9 76.7 -3% Collections Q3FY23 Q3FY24 9MFY23 9MFY24 *Others include rental asset sales, sale of land for digital Infra
Slide 27: Pro-forma P&L (basis operating performance)
Pro-forma P&L (basis operating performance) FY23 FY24E 9MFY24 Particulars INR Bn % INR Bn % INR Bn % Pre-sales 120.6 145.0 103.0 Embedded EBITDA 38.6 32% 43.5 30% 30.9 30% D&A 0.9 1.0 0.8 Finance Cost 10.0 7.5 5.9 PBT 27.7 23% 35.0 24% 24.2 23% Taxes (assumed rate: 25.2%) 7.0 8.8 6.1 PAT 20.7 17% 26
Slide 28: Financial Performance
Financial Performance INR bn 29.3 62.2 63.0 1% 65% 17.7 Revenue Q3FY23 Q3FY24 9MFY23 9MFY24 10.8 19.9 20.9 5% 90% 5.6 Adj. EBITDA 37% 32% 33% 32% Q3FY23 Q3FY24 9MFY23 9MFY24 5.7 8.0 9.5 19% 2.0 179% Adj. PAT 11% 19% 12% 15% Q3FY23 Q3FY24* 9MFY23* 9MFY24* Operating leverage driving higher Adj EBITDA
Slide 29: Micro-market performance for Q3FY24
Micro-market performance for Q3FY24 INR bn Average Sales Construction Area Completed Micro-markets Pre-Sales# Collections* Price (INR psf) spends (Mn. sq. ft.) South & Central 6.9 23,845 8.1 2.0 - Thane 3.2 11,109 3.6 1.3 1.0 Extended Eastern Suburbs 4.4 6,562 5.2 3.1 - Western Suburbs 2.1 17,324 2.
Slide 30: Micro-market performance for 9MFY24
Micro-market performance for 9MFY24 INR bn Average Sales Construction Area Completed Micro-markets Pre-Sales# Collections* Price (INR psf) spends (Mn. sq. ft.) South & Central 34.2 30,751 25.6 6.2 - Thane 9.6 10,717 11.3 4.4 1.5 Extended Eastern Suburbs 14.9 6,619 16.1 9.8 0.8 Western Suburbs 6.9 16
Slide 31: Launches in 9MFY24
Launches in 9MFY24 Own/ JDA Micro-market Launch Period Area (Mn .Sq.ft) Est. GDV (INR bn) Project Pune JDA Q1FY24 1.1 8.2 Western Suburbs JDA Q1FY24 0.3 4.1 Extended Eastern Suburbs Own Q1FY24 0.4 2.8 Eastern Suburbs JDA Q2FY24 0.5 10.6 Thane Own Q2FY24 0.3 4.5 Thane JDA Q2FY24 0.2 2.4 Extended East
Slide 32: Business Development: Surpassed guidance
Business Development: Surpassed guidance INR bn Micro-market Period Added Saleable Area (msf) Est. GDV MMR – South Central Q1FY24 4.3 74 MMR – South Central Q1FY24 1.1 16 MMR – South Central Q1FY24 0.4 12 MMR – Western Suburbs Q1FY24 0.3 10 Bangalore – South Q1FY24 1.0 8 MMR – Eastern Suburbs Q2FY24
Slide 33: Lodha: Micro-market wise supply
Lodha: Micro-market wise supply Planned Inventory Launches Residual Collections Ready Ongoing In next 12 months^ Beyond 12 months Land Micro-markets from Sold unsold unsold Bank Own JDA Own JDA units Land Projects Land Projects Largest land INR bn Mn. Sq. ft. bank amongst South & Central 35.1 0.8 2.
Slide 34: Market wise completion plan of ongoing projects (1/2)
Market wise completion plan of ongoing ‘for sale’ projects (1/2) Mn.sq ft. FY24 FY25 FY26 >= FY27 Sold/ Market Total area Unsold* Own JDA Own JDA Own JDA Own JDA Sold-PCM 0.07 - 0.28 - 0.02 0.00 0.11 0.06 South & Central 3.47 Sold-POCM 0.00 - 0.16 - 0.11 0.04 0.04 0.23 Mumbai Unsold 0.08 - 0.70 - 0.
Slide 35: Market wise completion plan of ongoing projects (2/2)
Market wise completion plan for ongoing ‘for sale’ projects (2/2) Mn.sq ft. Sold/ FY24 FY25 FY26 >= FY27 Market Total area Unsold* Own JDA Own JDA Own JDA Own JDA Sold-PCM - - - 0.18 - 0.33 - 0.20 Eastern Suburbs 3.22 Sold-POCM - - - 0.06 - 0.09 - 0.58 Unsold - - - 0.11 - 0.20 - 1.49 Sold-PCM - - 0.
Slide 36: Financials
Lodha Amara – Club House 03 Financials 35
Slide 37: Financial highlights for Q3FY24
Financial highlights for Q3FY24 INR bn Particulars Q3FY24 Q3FY23 Growth % 9MFY24 9MFY23 Growth % Revenue 29.3 17.7 65.2% 63.0 62.2 1.3% Adj. EBITDA^ 10.8 5.6 90.3% 20.9 19.9 5.0% Adj. EBITDA (%) 36.7% 31.8% 490bps 33.2% 32.1% 110bps Adj. PAT* 5.7 2.0 178.7% 9.5 8.0 18.6% Adj. PAT (%) 19.2% 11.4% 780
Slide 38: Consolidated Summary Balance Sheet
Consolidated Summary Balance Sheet INR bn As at As at As at As at ASSETS EQUITY AND LIABLITIES 31-Dec-23 31-Mar-23 31-Dec-23 31-Mar-23 Equity Share Capital 9.6 4.8 Tangible Assets 13.4 13.0 Other Equity 125.6 121.8 Intangible Assets 5.3 5.3 Non-Controlling Interests 0.6 0.6 Investments 5.4 2.4 Total
Slide 39: Company Overview
The Park 04 Company Overview 38 38
Slide 40: 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 and Chairman of Ethics Committee of BSE Rajinder Pal Singh, Non-Executive Director Director on the Board of Maruti Suzuki Former Chairman and Managing Director o
Slide 41: Strong management team
Strong management team Shaishav Dharia Deepak Chitnis Sushil Kumar Modi Chief Designer CEO – Townships, Director – GDI Chief Financial Officer Platform Previously served as senior architect Formerly worked at GMR, Aditya 27+ Excellent at Oberoi domain knowledge Constructions Pvt Ltd 25+ Former
Slide 42: Our Sustainability Strategy: Do Good, Do Well
Our Sustainability Strategy: Do Good, Do Well Identifying initiatives that enhance our impact and brings together our larger set of stakeholders to partner in the journey with us OUR ESG GOALS Ensure sustainability in our product E and operations by positively impacting the natural environment Posit
Slide 43: Best-in-class globally on measured ESG performance
We are best-in-class globally when it comes to measured ESG performance S&P Global Corporate GRESB Development Benchmark GRESB Standing Investments Sustainability Assessment 2023 2023 Benchmark 2023 Third highest CSA score out of ~300 Ranked 1st in Asia with a 5-star rating Ranked 8th in Asia with a
Slide 44: First Indian real estate company with SBTi validated Net-Zero Targets
First Real Estate Company in India to have SBTi validated Net-Zero Targets • Near-term targets: • Reduce absolute scope 1 and 2 GHG emissions 97.9% by FY2028 from a FY2022 base year • Reduce scope 3 GHG emissions 51.6% per square meter of area developed by FY2030 from a FY2022 base year • Long-term
Slide 45: Our commitment to Sustainability: Progress across key focus areas
Our commitment to Sustainability: Progress across key focus areas Environment • Green Certification received for ~50 million sqft across projects; process ongoing for ~42.9 million sqft across 35 residential projects • 95% of renewable energy share in our total energy consumption, across constructio
Slide 46: Annexure
World Towers 05 Annexure 4545
Slide 47: 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 48: Pune - fourth largest housing market of India
Pune - fourth largest housing market of India… Accelerating growth in INR 365bn market by establishing presence across multiple locations 1. Pimpri-Chinchwad 4. Central Pre-IPO, had 1 project Pre-IPO, had no presence With annual sales potential of INR >2bn Added 1 projects with GDV of INR ~4bn Absor
Slide 49: 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) Signed four projects at NIBM, Hinjewadi, Bund Garden & Kharadi; advanced stage of
Slide 50: Entered Bangalore housing market
Entered Bangalore housing market… Market size: INR ~400bn Micro-market Market Size (INR bn) 1 South 185.0 2 East 80.0 3 North 112.0 4 West 20.0 5 Central 3.0 Total 400.0 Source: Knight Frank, Industry 49
Slide 51: 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 two projects through JDA with develo
Slide 52: Supply side consolidating, unlikely to keep pace with demand
Supply side consolidating - unlikely to keep pace with accelerating demand Consolidation wave due to policy reforms and liquidity crisis… …has led to market share gains for listed developers 17% 60% >50% Incremental supply from 3x Developers count branded developers 6% Remaining Tier - 2 & 3 players
Slide 53: Mortgage an enabler, not inducer of demand
Steady as it goes: Mortgage an enabler, not inducer of demand Conservative Central Bank, low risk mortgage market: LTV < 85%, no teaser rates Mortgage as % of GDP 89% Rate cycle seem to have peaked; 68% pivot likely in CY24 52% 44% 45% Strong performance of mortgages 39% 34% through all parts
Slide 54: Low risk to margins from construction cost inflation
Low risk to margins from construction cost inflation Construction costs typically forms 25% to 45% of the sales price o Of which, one-third is related to low skilled and semi-skilled labor: plentiful supply though migration from rural areas (250+ mn people estimated to be ‘underemployed’ in agricu
Slide 55: Construction cost inflation moderation since Mar-22
Construction cost – inflation moderation since Mar-22 Mar’21 to Mar’22 Mar’21 to Dec’23 Commodity/Component % Share in total cost % Change Weighted Impact % Change Weighed Impact Steel 12.9% 35.1% 4.5% -1.2% -0.2% Flooring Tiles 5.0% 23.9% 1.2% 15.3% 0.8% Electrical/Plumbing 11.8% 10.1% 1.2% 4.5% 0.
Slide 56: Benefits of 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 57: 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 56
Slide 58: Key premium & luxury projects delivered
Key premium & luxury projects delivered Unique ability to create destinations New Cuffe Parade Lodha Altamount World Towers Lodha Park 57
Slide 59: 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 60: Thank You!
Thank You! For any further information, please write to investor.relations@lodhagroup.com 59
Macrotech Developers Limited (Lodha) — Q3 FY2024 Earnings Presentation on 6ix