Lodha Developers Ltd. · NSE:LODHA
Lodha Developers — Macrotech Developers Limited (Lodha) — Q2 FY2024 Earnings Presentation
58 slides from Lodha Developers's earnings presentation, Oct 28, 2023
Slide 1: Cover letter to stock exchanges
October 28, 2023 BSE Limited Scrip Code: 543287 Debt Segment – 974163, 974199, 974473, 974511, 974986, 975053, 975115 National Stock Exchange of India Limited Trading Symbol: LODHA Dear Sirs, Sub: Investor Presentation Ref: SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘t
Slide 2: Investor Presentation Second Quarter FY2024
Investor Presentation Second Quarter FY2024 28th October 2023
Slide 3: Index
INDEX Page No Highlights 4 Growth Drivers 10 Performance Update 22 Financials 33 Company Overview 36 Annexures 43 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 INR 35.3bn ( 12% YoY), best ever quarterly performance despite Q2 being Pre-sales* seasonally the weakest quarter and no new location launch Embedded ~30% for Q2 and ~30% for 1HFY24 EBITDA Margin# 2 projects with INR ~23bn GDV (>80% of INR 175bn full-year guidance Ne
Slide 7: Q2FY24 - Other Operating Highlights
Q2FY24 - Other Operating Highlights Price Growth Launches ~3% 1.9 msf Average YTD price Launches across MMR growth1 and Pune Cash Flow Net Debt INR 67.3bn Operating cash flow • Debt down by INR 5.4bn INR 12.6bn • Avg. borrowing cost reduced by ~5bps to 9.6% vs Jun-232 1YTD Price Growth– Weighted ave
Slide 8: Cash Flow
Cash Flow INR bn Office & Retail ‘For Sale’ Land Sales Q2FY24 1HFY24 (for rent) Pre-Sales 34.5 0.3 0.5 35.3 68.9 Collections 26.5 0.4 0.6 27.5 51.5 Net Collections* 23.7 0.4 0.6 24.7 46.0 Op. Expenses 11.8 0.1 0.2 12.1 25.0 - Const. Exp 8.2 0.1 0.2 8.5 18.5 - SG&A 3.3 - - 3.3 6.8 - Taxes - - - 0.4 -
Slide 9: Guidance for FY24
Guidance for FY24 INR bn Strong launch pipeline FY23 Actuals FY24 Guidance 1HFY24 led by robust business development provides visibility to FY24 pre- sales goals and Pre-Sales 120.7 145 68.9 sustained growth for future Operating Cashflow 56.6 ~ 60 21.0 New Project Additions 198.0 175+ 143.0 Below ce
Slide 10: Strong launch pipeline for rest of FY24
Strong launch pipeline for rest of FY24 Own/ JDA Est. GDV (INR Micro-market Area (Mn .Sq.ft) No of Projects Project bn) South Central JDA 0.5 24.1 1 South Central Own 0.3 13.5 1 Extended Eastern Suburbs Own 1.5 9.8 2 Eastern Suburbs JDA 1.6 26.8 3 Western Suburbs JDA 0.8 15.0 3 Pune Own 0.6 6.2 2 Pu
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' this decade
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 On the demand side, housing sales in top 7 cities to reach ~1mn units by CY30 from ~360k in CY22 o Consolidation wave due to policy reforms, liquidity
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 core markets of 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: Ongoing 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 Project Likely completion & impact Extended Western Suburbs Extended Eastern Suburbs Mumbai Trans CY23 – Brings South Mumbai Harbor Link closer Kalyan Upper Thane CY24 – Cuts trave
Slide 20: Building annuity income portfolio
Building annuity income portfolio Pan-India warehousing & industrial park platform Digital Targeting 25 msf area; 5.7 msf Infrastructure under development (Sep-23) Growing facilities management business with digital services layer Have a captive base of 60,000 households with high spending p
Slide 21: Digital Infra.: potential to generate significant recurring income
Digital Infra.: potential to generate significant recurring income Recurring income from lease as well as outright sale Digital infra boosting Palava Ecosystem DI Platform – Significant traction from marquee users for leasing at our DI Park Added one more industry (Cold Storage) to the Palava Ecos
Slide 22: Commercial & retail assets with annual rent potential
Commercial & retail assets with annual rent potential of INR ~2.6 bn One Lodha Place iThink Palava Palava Mall Area in msf Location Worli (World Towers) Palava (Office) Xperia Mall Leasable area^ 0.73 0.58 0.42 Area Leased^ 0.21 0.15 0.39 0.43: Under development (Est. Operating Status Ready completi
Slide 23: Performance Update
Upper Thane 03 Performance Update 22
Slide 24: Operational Performance
Operational Performance INR bn For Sale Others* 68.9 35.3 60.0 31.5 66.6 24% 20% 53.5 34.5 28.9 Pre-Sales 2.1 msf 2.6 msf 4.4 msf 5.4 msf Q2FY23 Q2FY24 1HFY23 1HFY24 27.5 51.5 23.8 16% Collections 49.9 3% Q2FY23 Q2FY24 1HFY23 1HFY24 *Others include rental asset sales, sale of land for digital Infra
Slide 25: Pro-forma P&L (basis operating performance)
Pro-forma P&L (basis operating performance) FY23 FY24E 1HFY24 Particulars INR Bn % INR Bn % INR Bn % Pre-sales 120.6 145.0 68.9 Embedded EBITDA 38.6 32% 43.5 30% 20.7 30% D&A 0.9 1.0 0.5 Finance Cost 10.0 7.5 4.1 PBT 27.7 23% 35.0 24% 16.0 23% Taxes (assumed rate: 25.2%) 7.0 8.8 4.0 PAT 20.7 17% 26.
Slide 26: Financial Performance
Financial Performance INR bn 44.4 17.7 17.5 -24% 33.7 -1% Revenue Q2FY23 Q2FY24 1HFY23 1HFY24 5.5 14.3 5.3 5% -29% 10.2 Adj. EBITDA 30% 32% 32% 30% Q2FY23 Q2FY24 1HFY23 1HFY24 3.7 7.2 -42% 2.1 Adj. PAT -47% 3.8 19% 12% 16% 11% Q2FY23* Q2FY24 1HFY23* 1HFY24 Lower Adj. EBITDA & PAT Margin in 1HFY24
Slide 27: Micro-market performance for Q2FY24
Micro-market performance for Q2FY24 INR bn Average Sales Construction Area Completed Micro-markets Pre-Sales# Collections* Price (INR psf) spends (Mn. sq. ft.) South & Central 15.7 33,066 9.2 1.9 - Thane 3.3 10,636 4.0 1.4 0.5 Extended Eastern Suburbs 4.4 6,599 5.8 3.0 - Western Suburbs 2.1 16,152 2
Slide 28: Micro-market performance for 1HFY24
Micro-market performance for 1HFY24 INR bn Average Sales Construction Area Completed Micro-markets Pre-Sales# Collections* Price (INR psf) spends (Mn. sq. ft.) South & Central 27.3 33,177 17.6 4.2 - Thane 6.3 10,528 7.7 3.2 0.5 Extended Eastern Suburbs 10.5 6,553 10.9 6.7 0.7 Western Suburbs 4.8 16,
Slide 29: Launches in 1HFY24
Launches in 1HFY24 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 30: Business Development: 80%+ of annual target achieved in H1
Business Development: 80%+ of annual target achieved in H1 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 Bengaluru - South Q1FY24 1.0 8 MMR – East
Slide 31: 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 JDA JDA units Own Land Own Land Projects Projects INR bn Mn. Sq. ft. Acres South & Central 34.4 24.1 64.0 0.3 1.0 0.9 6.1
Slide 32: Market wise completion plan of ongoing 'for sale' 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 0.19 - 0.15 - 0.02 0.00 0.11 0.07 South & Central 3.20 Sold-POCM 0.00 - 0.12 - 0.01 0.03 0.04 0.17 Mumbai Unsold 0.15 - 0.68 - 0.
Slide 33: Market wise completion plan for ongoing 'for sale' projects (2/2)
Market wise completion plan for ongoing ‘for sale’ projects (2/2) Mn.sq ft. FY24 FY25 FY26 >= FY27 Sold/ Market Total area Unsold* Own JDA Own JDA Own JDA Own JDA Sold-PCM - - - 0.18 - 0.33 - 0.20 Eastern Suburbs 2.73 Sold-POCM - - - 0.04 - 0.08 - 0.34 Unsold - - - 0.13 - 0.20 - 1.23 Sold-PCM - - 0.
Slide 34: Financials
Lodha Amara – Club House 03 Financials 33
Slide 35: Financial highlights for Q2FY24
Financial highlights for Q2FY24 INR bn Particulars Q2FY24 Q2FY23 Growth % 1HFY24 1HFY23 Growth % Revenue 17.5 17.7 (0.9)% 33.7 44.4 (24.2)% Adj. EBITDA^ 5.5 5.3 5.2% 10.2 14.3 (28.8)% Adj. EBITDA (%) 31.6% 29.7% 190bps 30.2% 32.1% (190)bps Adj. PAT* 2.1 3.7 (42.4)% 3.8 7.2 (47.3)% Adj. PAT (%) 12.0%
Slide 36: Consolidated Summary Balance Sheet
Consolidated Summary Balance Sheet INR bn As at As t As at As at ASSETS EQUITY AND LIABLITIES 30-Sep-23 31-Mar-23 30-Sep-23 31-Mar-23 Equity Share Capital 9.6 4.8 Tangible Assets 13.3 13.0 Other Equity 120.2 121.8 Intangible Assets 5.3 5.3 Non-Controlling Interests 0.6 0.6 Investments 5.7 2.4 Total
Slide 37: Company Overview
The Park 05 Company Overview 36 36
Slide 38: 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 39: 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 24+ Former
Slide 40: Our Sustainability Strategy: Do Good, Do Well
Our Sustainability Strategy: Do Good, Do Well Identify 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 Positive
Slide 41: Best-in-class globally when it comes to 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 Second highest CSA score out of ~200 Ranked 1st in Asia with a 5-star rating Ranked 8th in Asia with
Slide 42: Our commitment to Sustainability: Progress across key focus areas
Our commitment to Sustainability: Progress across key focus areas Environment • Organized the first edition of RMI-Lodha Sustainability Conclave in September 2023; Brought experts together for co-creating actionable strategies which can accelerate net-zero transition of the built environment • Green
Slide 43: RMI-Lodha Sustainability Conclave
RMI-Lodha Sustainability Conclave RMI-Lodha Sustainability Conclave: Two-day event serving as a platform for industry experts and visionaries to synergise and create actionable strategies for accelerating Net-Zero transition of the built environment Net Zero Urban Accelerator Launched ‘Gateway to Fi
Slide 44: Annexure
@ RENT x ~~ ~ SSS World Towers SSS — ao
Slide 45: 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 46: 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 47: 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 48: 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 47
Slide 49: 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 50: 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 51: 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 2HFY24 52% 44% 45% Strong performance of mortgages 39% 34% through all part
Slide 52: 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 53: Construction cost – inflation moderation since Mar-22
Construction cost – inflation moderation since Mar-22 Mar’21 to Mar’22 Mar’21 to Sep’23 Commodity/Component % Share in total cost % Change Weighted Impact % Change Weighed Impact Steel 12.9% 35.1% 4.5% -2.0% -0.3% Flooring Tiles 5.0% 23.9% 1.2% 15.3% 0.8% Electrical/Plumbing 11.8% 10.1% 1.2% 4.9% 0.
Slide 54: 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 55: 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 54
Slide 56: Key premium & luxury projects delivered
Key premium & luxury projects delivered Unique ability to create destinations New Cuffe Parade Lodha Altamount World Towers Lodha Park 55
Slide 57: 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 58: Thank You!
Thank You! For any further information, please write to investor.relations@lodhagroup.com 57
Macrotech Developers Limited (Lodha) — Q2 FY2024 Earnings Presentation on 6ix