Lodha Developers Ltd. · NSE:LODHA
Lodha Developers — Macrotech Developers Limited (Lodha) — Q3 FY2023 Earnings Presentation
52 slides from Lodha Developers's earnings presentation, Jan 24, 2023
Slide 1: Exchange filing cover letter
January 24, 2023 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 – 400 051 Mumbai- 400001 Trading Symbol : LODHA Scr
Slide 2: Investor Presentation Third Quarter FY2023
Investor Presentation Third Quarter FY2023 24th January 2023
Slide 3: Index
INDEX Page No Highlights 4 Performance Update 19 Financials 23 Company Overview 28 Annexure 36 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: Q3FY23 Highlights
World Tower – Ball Room 01 Q3FY23 Highlights 44
Slide 6: Q3FY23 - KPIs
Q3FY23 - KPIs INR 30.3bn, 16% YoY, best ever 3Q Pre-sales* 9MFY23 Pre-sales at INR 90.4bn ( 62% YoY), surpassing FY22 pre-sales of INR 90.2bn Embedded ~31% for 3Q and ~33% for 9M EBITDA Margin# New Projects Added 4 projects – 5.2 msf saleable area with INR ~85bn GDV Added 9MFY23 addition a
Slide 7: Q3FY23 - Operating performance at a glance
Q3FY23 - Operating performance at a glance Pre-sales Collections Sales-mix INR 30.3bn INR 26.8bn^ 63% 16% yoy 26% yoy Of sales from affordable and mid-income projects Price Growth Launches Net Debt INR 80.4bn ~5% 2.3 msf • Reduced INR ~7.5bn Average YTD price Launches across MMR • Average borrowing
Slide 8: Operational Performance
Operational Performance INR bn For Sale Others* 90.4 30.3 55.7 83.2 26.1 29.7 Pre-Sales 56% 26.1 14% 53.2 2.4 msf 2.5 msf 5.0 msf 6.9 msf 3Q FY22 3Q FY23 9M FY22 9M FY23 26.8 76.7 21.3 57.5 33% 26% Collections 3Q FY22 3Q FY23 9M FY22 9M FY23 msf 5.9 1.9 2.5x 1.1 73% Completions 2.4 3Q FY22 3Q FY23 9
Slide 9: Financial Performance (1/2)
Financial Performance (1/2) Constraints of Ind-As: Revenue recognition limited to projects which are completed (OC received) in each quarter and hence, variability is high SG&A costs booked as per existing period expenses leading to increased impact on profitability in growth phase We believe,
Slide 10: Financial Performance (2/2)
Financial Performance (2/2) INR bn 62.2 20.6 57.9 17.7 7% -14% Revenue 3Q FY22 3Q FY23 9M FY22 9M FY23 20.1 19.9 7.0 -1% -19% 5.7 Adj. EBITDA 34% 32% 32% 35% 3Q FY22 3Q FY23 9M FY22 9M FY23 10.2 3.0 6.9 48% 2.8 6% Adj. PAT 13% 16% 11% 16% 3Q FY22 3Q FY23 9M FY22 9M FY23* Adj. EBITDA = After Grossing
Slide 11: Guidance for FY23
Guidance for FY23 INR bn FY23E vs FY22 FY23 Guidance** 9M FY23 Guidance Pre-Sales 90.2 115.0 90.4 Likely to exceed For Sale 84.4 105.0 83.2 Others* 5.8 10.0 7.2 Operating Cashflow 39.5 ~ 60.0 38.1 Tracking New Project Additions 146.0 ~ 150.0 178.0 Exceeding Achieve INR ~70 bn by Mar-23; Debt Net Deb
Slide 12: Targeting 20% Pre-sales CAGR with 20% RoE
Targeting 20% Pre-sales CAGR with 20% RoE Share of pre-sales in steady PBT Margin Profile ROE Profile state Owned land projects ~60% 27-30% 15% to 20% JDA ~40% 17-19% 30%+ Overall ~20% 11
Slide 13: Pro-forma P&L (basis operating performance)
Pro-forma P&L (basis operating performance) INR bn FY23 Pro-forma INR Bn % Pre-sales 115.0 Embedded EBITDA 36.8 32% On declining trajectory D&A 1.0 Finance Cost 10.0 PBT 25.8 22.4% Targeting ~20% by Taxes (assumed rate: 25.2%) 6.5 FY24 basis embedded EBITDA PAT 19.3 16.8% performance RoE ~15.5% 12
Slide 14: New launches in 9MFY23
New launches in 9MFY23 Own/ JDA Launch Est. GDV Micro-market Area (Mn .Sq.ft) Est. OC Remarks Project Period (INR bn) Extended Eastern Suburbs Own 1QFY23 1.2 7.7 FY25 Palava, Upper Thane Thane Own 1QFY23 0.4 4.0 FY25 Crown Kolshet Eastern Suburbs JDA 1QFY23 0.2 3.9 FY26 Bellagio – Powai South Centra
Slide 15: Planned launches for 4QFY23
Planned launches for 4QFY23 Own/ JDA Est. GDV (INR Micro-market Area (Mn .Sq.ft) No of Projects Project bn) South Central JDA 0.5 11.3 1 Extended Eastern Suburbs Own 0.9 5.3 1 Eastern Suburbs JDA 0.7 14.8 1 Western Suburbs JDA 0.6 9.4 2 Pune Own 0.3 4.2 2 Pune JDA 0.1 1.1 1 Thane Own 0.6 5.6 2 Thane
Slide 16: New Projects: Added four projects in 3QFY23
New Projects: Added four projects in 3QFY23 INR bn Micro-market Saleable Area (msf) Est. GDV Est. Launch MMR – Eastern Suburbs* 1.7 43.0 FY23 Pune – South West 3.3 26.0 FY24 MMR - South Central 0.5 24.0 FY24 Pune – North East* 2.6 20.0 FY23# MMR – Western Suburbs 0.8 12.5 FY23 Bangalore – North 1.3
Slide 17: Recurring Cash-flow generation through land monetization
Recurring Cash-flow generation through land monetization INR bn Jan 21- Dec-22 9MFY23 3QFY23 For Digital Infra use 8.6 4.5 0.2 JVs/Platform 4.6 2.7 - Outright 4.0 1.8 0.2 For other uses 5.4 2.0 0.4 Total 14.0 6.5 0.7 Creates virtuous cycle for our nearby developments due to job creation and infra bu
Slide 18: Green Digital Infra.: potential to generate significant annuity income
Green Digital Infra.: potential to generate significant annuity income KPIs (all nos in mn Sq ft.) Shaishav Dharia Director – GDI Platform Formerly worked with McKinsey & Notable Period Till Dec-22* 9MFY23 3QFY23 24+ Company and Logic Tools Clients Area Under 5.7 3.6 0.4 Development Devender Sin
Slide 19: Commercial assets with rent potential of INR ~2.6 bn p.a.
Commercial assets with rent potential of INR ~2.6 bn p.a. One Lodha Place iThink Thane iThink Palava Palava Mall Area in msf Location Worli (World Towers) Thane (Clariant Plot) Palava (Office) Xperia Mall Total leasable area 0.75 0.41 0.58 0.42 Area Sold - 0.30 - - Residual area available 0.75 0.11
Slide 20: Performance Update
Upper Thane 02 Performance Update 19
Slide 21: Micro-market performance for 3QFY23
Micro-market performance for 3QFY23 INR bn Average Sales Construction Area delivered Micro-markets Pre-Sales# Collections* Price (INR psf) spends (Mn. sq. ft.) South & Central 10.9 40,907 9.5 1.5 0.3 Thane 2.6 10,024 4.5 1.4 0.5 Extended Eastern Suburbs 5.5 6,113 6.5 2.8 1.1 Western Suburbs 1.8 14,8
Slide 22: Micro-market performance for 9MFY23
Micro-market performance for 9MFY23 INR bn Average Sales Construction Area delivered Micro-markets Pre-Sales# Collections* Price (INR psf) spends (Mn. sq. ft.) South & Central 30.5 36,212 27.0 6.1 0.3 Thane 9.0 10,360 13.3 4.2 0.4 Extended Eastern Suburbs 16.8 6,083 14.8 9.4 3.8 Western Suburbs 9.9
Slide 23: 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 bn Mn. Sq. ft. Acres South & Central 27.8 37.8 70.4 0.3 0.9 0.9 0.8 -
Slide 24: Financials
Lodha Amara – Club House 03 Financials 23
Slide 25: Financial highlights for 3Q FY23
Financial highlights for 3Q FY23 INR bn Particulars 3QFY23 3QFY22 Growth % 9MFY23 9MFY22 Growth (%) Revenue 17.7 20.6 (13.9)% 62.2 57.9 7.4% Adj. EBITDA^ 5.7 7.0 (19.1)% 19.9 20.1 (1.1)% Adj. EBITDA (%) 31.8% 33.9% (210)Bps 32.1% 34.8% (270)Bps Adj. PAT* 3.0 2.8 6.2% 10.2 6.9 47.6% Adj. PAT (%) 16.5
Slide 26: Consolidated Summary Balance Sheet
Consolidated Summary Balance Sheet INR bn As at As at As at As at ASSETS EQUITY AND LIABLITIES 31-Dec-22 31-Mar-22 31-Dec-22 31-Mar-22 Equity Share Capital 4.8 4.8 Tangible Assets 12.8 13.8 Other Equity 114.1 116.2 Intangible Assets 5.4 5.4 Non-Controlling Interests 0.6 0.6 Investments 2.4 5.7 Total
Slide 27: Cash Flow – 3Q FY23
Cash Flow – 3Q FY23 INR bn Office & Retail Other Land & ‘For Sale’ Digital Infra Total (for rent) Tenancy Sales Pre-Sales 29.7 - 0.2 0.4 30.3 Collections 26.3 0.2 0.1 0.2 26.8 Net* Collections 24.1 0.2 0.1 0.2 24.6 Op. Expenses 10.2 0.0 - - 10.2 -Const. Exp 6.9 0.0 - - 6.9 -SG&A 2.9 - - - 2.9 -Taxes
Slide 28: 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 Total area Sold/ FY24 FY25 >= FY26 Business under U
Slide 29: Company Overview
The Park 04 Company Overview 28 28
Slide 30: 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 31: 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 32: Strong management team
Strong management team Shaishav Dharia Deepak Chitnis Sushil Kumar Modi CEO – Townships, Director – GDI Chief Designer Platform Chief Financial Officer Previously served as senior architect Formerly worked with McKinsey & Formerly worked at GMR, Aditya Excellent domain knowledge 24+ 27+ at Obe
Slide 33: We are best in class when it comes to measured ESG performance
We are best in class when it comes to measured ESG performance…. S&P Global Corporate Sustainability Assessment Global Real Estate Sustainability Benchmark (GRESB), 2022 - Among top ~1% of the 867 global real estate companies - Received exceptional scores in our first assessment itself - Strong impr
Slide 34: Strategy to achieve the overarching ESG Goals - Environmental
Strategy to achieve the overarching ESG Goals Overarching Environmental Strategy Goals Be resilient to climate change while not contributing to global warming Achieve Carbon Neutrality in operations (Scope1, 2) by 2035 or before; Align Scope 3 emissions reduction roadmap with 1.5 ℃ ambition lLodha N
Slide 35: Strategy to achieve the overarching ESG Goals - Social
Strategy to achieve the overarching ESG Goals Overarching Goals Social Strategy Create a more diverse & inclusive workforce, with a workplace gender diversity ratio of 44% by 2027^ Zero-fatality, zero hospitalisation and lowest LTIFR in the industry; Education, healthcare and livelihood for our comm
Slide 36: Strategy to achieve the overarching ESG Goals - Governance
Strategy to achieve the overarching ESG Goals Governance Strategy Overarching Strong board with diverse experiences to guide management through the business cycles Goals Meet expectation of diverse set of stakeholders through deeper engagement, transparent communication & ethical business conduct St
Slide 37: Annexure
@ RENT x ~~ ~ SSS World Towers SSS — ao
Slide 38: 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 39: 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 40: 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 41: Construction cost – inflation moderation since Mar-22
Construction cost – inflation moderation since Mar-22 Mar’21 to Mar’22 Mar’21 to Dec’22 Commodity/Component % Share in total cost % Change Weighted Impact % Change Weighed Impact Steel 12.9% 35.1% 4.5% 7.0% 0.9% Flooring Tiles 5.0% 23.9% 1.2% 15.3% 0.8% Electrical/Plumbing 11.8% 10.1% 1.2% 6.0% 0.7%
Slide 42: 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 43: 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 44: 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 45: Pune - fourth largest housing market of India
Pune - fourth largest housing market of India Market size: INR ~365bn Micro-market Market Size (INR bn) 1 Central 10.0 2 North-East 75.0 3 South-East 40.0 4 South-West 55.0 5 North-West 100.0 6 Pimpri-Chinchwad 85.0 Total 365.0 Source: CRE Matrix 44
Slide 46: Pune growth to contribute 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 47: 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 46
Slide 48: 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 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) — Q3 FY2023 Earnings Presentation on 6ix