Lodha Developers Ltd. · NSE:LODHA
Lodha Developers — Macrotech Developers Limited (Lodha) — Q1 FY2025 Earnings Presentation
58 slides from Lodha Developers's earnings presentation, Jul 30, 2024
Slide 1: Exchange filing cover letter
July 30, 2024 BSE Limited Scrip Code: 543287 Debt Segment – 974163, 974199, 974473, 974511, 974986, 975053, 975115, 975192, 975560 National Stock Exchange of India Limited Trading Symbol: LODHA Dear Sirs, Sub: Investor Presentation on Financial Results for the quarter ended June 30, 2024 Ref: Securi
Slide 2: Investor Presentation First Quarter FY2025
Investor Presentation First Quarter FY2025 30th July, 2024
Slide 3: Index
Index Page No Highlights 6 Growth Drivers 12 Performance Update 22 Financials 33 Company Overview 36 Annexures 44 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 Amongst India’s Largest Real Estate Strong operating cash flow generation giving ability to grow & de-lever in tandem Planned consistent growth of ~20% p.a. Developers in housi
Slide 5: Impact of change in LTCG tax on Real Estate (1/2)
Impact of change in LTCG tax on Real Estate (1/2) Illustration: Sample unit - 1000 sft carpet area unit in Returns across various fixed income products Central Mumbai assuming slab rate at 35% Purchase Year (all fig. in INR mn) 1985 2005 2022 Fixed income asset type Gross Net of taxes Purchase Price
Slide 6: Impact of change in LTCG tax on Real Estate (2/2)
Impact of change in LTCG tax on Real Estate (2/2) Pros ✓ Real estate is the best asset class on post tax basis vs fixed income product class such as FD, Debt MF ✓ More tax liability on sale of old properties, nudging taxpayer to invest in new residential house u/s. 54 to save tax ✓ Higher capital ga
Slide 7: Highlights
World Tower – Ball Room 01 Highlights 66
Slide 8: Key Performance Indicators
Key Performance Indicators Pre-sales ✓ INR 40.3bn ( 20% YoY), best ever Q1 Embedded ✓ ~33% EBITDA Margin1 New Projects ✓ Three projects with INR 111bn of GDV having development potential of 2.7 Added mn sq ft saleable area ✓ Lodha Genius Program, our flagship education initiative, had its second coh
Slide 9: Q1FY25 - Other Operating Highlights
Q1FY25 - Other Operating Highlights Price Growth Launches ~2% 1.8 msf Q1FY25 price growth1 Handovers Net Debt INR 43.2bn • Net D/E at 0.24x, well 1,777 units below our 0.5x equity ceiling • Avg. cost of debt at 9.1% (down 30 bps QoQ) 1YTD Price Growth– Weighted average of projects having sales in Q1
Slide 10: Cash Flow
Cash Flow INR bn ‘For Sale’ Annuity Q1FY25 FY24 Pre-Sales 40.3 - 40.3 145.2 Collections 26.4 0.6 26.9 112.6 Net Collections1 22.9 0.6 23.5 106.8 Op. Expenses 16.9 - 16.9 49.6 - Const. Exp 11.9 - 11.9 36.0 - SG&A 4.0 - 4.0 14.0 - Taxes - - 0.9 (0.4) Operating cash flow 6.0 0.6 6.6 57.2 - Interest pay
Slide 11: Guidance for FY25
Guidance for FY25 INR bn FY24 Actuals FY25 Guidance Q1FY25 Pre-Sales 145 175 40 In line with plan to ramp up construction spends leading to Operating Cashflow 57 65 7 higher collections and OCF New Project Additions 203 210 111 Pre-QIP: 0.34x Net Debt/Equity <= 0.5x 0.24x Post-QIP: 0.17x On track to
Slide 12: Robust launch pipeline for rest of FY25
Robust launch pipeline for rest of FY25 Own/ JDA Est. GDV (INR Micro-market Area (Mn .Sq.ft) No of Projects Project bn) New Project Launches Eastern Suburbs JDA 0.2 6.0 1 Eastern Suburbs Own 0.7 10.0 1 Extended Eastern Suburbs Own 0.2 1.6 1 Pune Own 0.5 3.9 1 Pune JDA 0.4 4.7 1 South Central JDA 1.0
Slide 13: Growth Drivers
Palava 02 Growth Drivers 1212
Slide 14: 75-100 mn new households to become 'home ownership capable' this decade
75-100 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 125 mn (32%) 5,00
Slide 15: '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 210 Excluding impact of Q4 equity raise ~20% ~20 % CAGR 19% ~300bps 145 17% FY24 FY26 FY24 FY26 Pre-Sales RoE (Proforma) 14
Slide 16: Significant headroom for our growth in existing markets
Significant headroom for our growth in existing markets INR bn MMR Pune Bangalore FY24 market share ~10% ~5% ~2% ~2,350 ~850 ~950 ~10 % ~10 % ~10 % CAGR CAGR CAGR ~1,000 ~350 ~400 Market Size FY22 FY31 FY22 FY31 FY22 FY31 Likely market share ~20% ~15% ~12% by decade end FY31 Pre-sales ~470 ~130 ~120
Slide 17: Palava is at the epicenter of MMR's infrastructure upgrades
Palava is at the epicenter of Mumbai Metropolitan Region (MMR)’s infrastructure upgrades Towards Ahmedabad Palava Palava Katai Naka Bullet Train Station ~40 min Drive Airoli Katai Naka Corridor Palava to Airoli ~10-15 mins ~5 mins Palava ~20 mins Tunnel Through Parsik Hills Airoli – To BKC Navi Mumb
Slide 18: Industrial land prices have risen substantially over 3 years
Industrial land prices have risen substantially over 3 years, housing prices to follow suit INR mn/acre 65 2.5x in three years 50 29 26 Lodha Morgan Stanley JV Lodha GDIP Coldchain Logistic Co. Specialty Petroleum Product Manufacturer 2021 2022 2023 2023 (INR bn) Jan-21 to Jun-24 FY24 Q1FY25 Cashflo
Slide 19: Palava: Large pricing arbitrage compared to competing markets
Palava: Large pricing arbitrage compared to competing markets, opportunity to increase price + volume Palava 10k Thane 16k-21k BKC Airoli 50k- 18k- 65k 22k Goregaon 32k -40k Mulund 22k -26k Palava & Upper Thane set to deliver US$175-200 bn of sales over next 3 decades with ~50% EBITDA margins Nos in
Slide 20: Gradually building annuity income pool
Gradually building annuity income pool ◼ Focus on developing premium high street retail as adjunct to residential Office & developments Retail ◼ Select high quality offices ◼ Growing facilities management business ◼ Have a captive base of 65,000 households, growing inline with our residential busine
Slide 21: Office & retail assets with rent potential of INR ~3.5 bn p.a.
Office & retail assets with rent potential of INR ~3.5 bn p.a. Annual Rental Asset Status Area (msf) Area Leased (msf) Potential1 (INR mn) One Lodha Place, Worli Ready 0.37 0.26 1,041 Ready 0.16 0.16 76 iThink, Palava U/C 0.43 - 205 Office Total 0.95 0.42 1,322 Xperia Mall, Palava Ready 0.42 0.39 35
Slide 22: Digital Infra.: potential to generate significant recurring income
Digital Infra.: potential to generate significant recurring income ✓ Strong demand from end users of diverse industries E- Commerce, Fashion & Sportswear retailers, Consumer Goods, 3-PL, Logistics, Data Center, EV Ecosystem, FMCG, Engineering Goods, Life Sciences, etc. ✓ Leased out to two large glob
Slide 23: Performance Update
Upper Thane 03 Performance Update 22
Slide 24: Operational Performance
Operational Performance INR bn 145.2 120.1 20% 20% 145.2 40.3 120.6 33.5 Pre-Sales 2.8 msf 2.4 msf 9.4 msf 11.1 msf Q1FY24 Q1FY25 FY23 FY24 112.6 26.9 106.1 6% Collections 12% 24.0 Q1FY24 Q1FY25 FY23 FY24 23
Slide 25: Pro-forma P&L (basis operating performance)
Pro-forma P&L (basis operating performance) FY24 FY25E Q1FY25 Particulars INR Bn % INR Bn % INR Bn % Pre-sales 145.2 175.0 40.3 Embedded EBITDA 44.0 30% 54.3 31% 13.3 33% D&A 2.0 2.0 0.6 Finance Cost 7.7 5.0 1.3 PBT 34.3 24% 47.3 27% 11.4 28% Taxes (assumed rate: 25.2%) 8.6 11.7 2.9 PAT 25.7 18% 35.
Slide 26: Financial Performance
Financial Performance INR bn 103.2 28.5 9% 94.7 76% 16.2 Revenue Q1FY24 Q1FY25 FY23 FY24 9.6 34.3 2.1x 16% 29.7 4.6 Adj. EBITDA 29% 34% 31% 33% Q1FY24 Q1FY25 FY23 FY24 4.8 16.2 1.7 20% 2.9x Adj. PAT 13.5 10% 16% 14% 15% Q1FY24 Q1FY25 FY23* FY24* Adj. PAT Margin expands on operating leverage Adj. EBI
Slide 27: Micro-market performance for Q1FY25
Micro-market performance for Q1FY25 INR bn Average Sales Price Construction Micro-markets Pre-Sales1 Collections2 (INR psf) spends South & Central 8.9 34,507 4.1 2.9 Thane 3.1 11,442 2.7 1.5 Extended Eastern Suburbs 3.8 7,282 4.4 3.7 Western Suburbs 5.4 32,172 1.7 0.9 Pune 10.0 10,552 3.4 1.5 Easter
Slide 28: New premium launches in 2nd half to propel Palava pre-sales
New premium launches in 2nd half to propel Palava pre-sales INR bn 80 ✓ Commenced the journey of premiumization in 2HFY24 ✓ This led to consciously reducing 1bhk/ Crown segment pre-sales ~20 % CAGR 22 ✓ Launches in premium segment awaiting opening up of infrastructure projects like Airoli – Katai Na
Slide 29: Launches in Q1FY25
Launches in Q1FY25 Micro-market Own/ JDA Project Area (Mn .Sq.ft) Est. GDV (INR bn) No of Project New project launches Western Suburbs Own 0.2 14.8 1 Pune JDA 0.8 9.1 1 Extended Eastern Suburbs Own 0.3 2.5 1 Total 1.3 26.4 3 New phase launches at existing projects At existing projects Own 0.6 3.7 3
Slide 30: Business Development Q1FY25
Business Development Q1FY25 INR bn Micro-market Saleable Area (msf) Est. GDV MMR – Western Suburbs 1.1 77 MMR – Western Suburbs 0.2 16 Pune – North West 1.4 18 Total 2.7 111 Achieved more than 50% of full year guidance of INR 210bn 29
Slide 31: Micro-market wise supply
Micro-market wise supply Planned Inventory Launches Residual Collections Ready Ongoing In next 12 months1 12 to 60 months Land Micro-markets from Sold unsold unsold Bank Own JDA Own JDA units Land Projects Land Projects INR bn Mn. Sq. ft. Largest land South & Central 39.8 1.1 1.9 - 1.0 0.9 7.7 - ban
Slide 32: Micro-market wise completion plan of ongoing 'for sale' projects (1/2)
Micro-market wise completion plan of ongoing ‘for sale’ projects (1/2) Mn.sq ft. FY25 FY26 FY27 >= FY28 Sold/ Micro-market Total area Unsold1 Own JDA Own JDA Own JDA Own JDA Sold-PCM 0.21 - 0.02 - 0.11 0.06 - - South & Central 3.22 Sold-POCM 0.20 - 0.20 - 0.05 0.33 0.10 - Mumbai Unsold 0.33 - 0.26 -
Slide 33: Micro-market wise completion plan for ongoing 'for sale' projects (2/2)
Micro-market wise completion plan for ongoing ‘for sale’ projects (2/2) Mn.sq ft. Sold/ FY25 FY26 FY27 >= FY28 Micro-market Total area Unsold1 Own JDA Own JDA Own JDA Own JDA Sold-PCM - 0.17 - 0.32 - 0.20 - - Eastern Suburbs 3.74 Sold-POCM - 0.07 - 0.10 - 1.04 - - Unsold - 0.10 - 0.19 - 1.54 - - Sol
Slide 34: Financials
Lodha Amara – Club House 04 Financials 33
Slide 35: Financial highlights for Q1FY25
Financial highlights for Q1FY25 INR bn Particulars Q1FY25 Q1FY24 Growth % FY24 FY23 Growth % Revenue 28.5 16.2 76.0% 103.2 94.7 8.9% Adj. EBITDA1 9.6 4.6 106.7% 34.3 29.7 15.6% Adj. EBITDA (%) 33.7% 28.7% 500bps 33.3% 31.4% 190bps Adj. PAT2 4.8 1.7 186.0% 16.2 13.5 19.6% Adj. PAT (%) 16.3% 10.0% 630
Slide 36: Consolidated Summary Balance Sheet
Consolidated Summary Balance Sheet INR bn As at As at As at As at EQUITY AND LIABLITIES ASSETS 30-Jun-24 31-Mar-24 30-Jun-24 31-Mar-24 Equity Share Capital 10.0 9.9 Tangible Assets 7.4 7.2 Other Equity 169.7 164.7 Intangible Assets 4.3 4.6 Non-Controlling Interests 0.7 0.6 Investments 22.8 25.0 Tota
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 ◼ Formerly 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 D
Slide 39: Strong management team
Strong management team Shaishav Dharia Deepak Chitnis Sushil Kumar Modi CEO – Extended Eastern Suburbs, Chief Designer Thane, Annuity Assets Chief Financial Officer ◼ Previously served as senior architect ◼ Formerly worked with McKinsey & ◼ Formerly worked at GMR, Aditya 27+ Excellent at Oberoi doma
Slide 40: 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 ~500 Ranked 1st in Asia with a 5-star rating Ranked 8th in Asia with a
Slide 41: Our Sustainability Strategy: Do Good, Do Well
Our Sustainability Strategy: Do Good, Do Well We recognize ESG issues as long-term risks that also present opportunities for value creation when strategically addressed. Our strategy enables us to identify initiatives that amplify our impact and foster collaboration with our diverse stakeholders on
Slide 42: Our Environmental Strategy: Resilience & Decarbonisation
Our Environmental Strategy: Resilience & Decarbonisation Our environmental sustainability strategy rests on two fundamental pillars: decarbonisation and resilience. While we actively pursue measures to DECARBONISATION reduce our footprint and transition towards net-zero, we also prioritise making ou
Slide 43: Our Social Strategy: Creating impact through business & philanthropy
Our Social Strategy: Creating impact through business & philanthropy We drive significant social impact through both our business operations and philanthropic efforts. Within our business, we engage with our stakeholders, including customers, residents, employees, workers and value chain. In our phi
Slide 44: Our Approach to Governance: Philosophy, Pillars & Goals
Our Approach to Governance: Philosophy, Pillars & Goals OUR GOVERNANCE FRAMEWORK PILLARS OF GOVERNANCE Diverse Board which plays a crucial role in overseeing 1 and safeguarding long term interests of stakeholders Responsible Integrity and Business Conduct Transparency Transparent procedures and prac
Slide 45: Annexure
World Towers 06 Annexure 4444
Slide 46: Palava & Upper Thane set to deliver US$175-200 bn of sales
Palava & Upper Thane set to deliver US$175-200 bn of sales over next 3 decades with ~50% EBITDA margins 3 mega trends moving Palava & Upper Thane to becoming sought after suburbs 1. Mumbai – World’s densest metropolis, sea restricts expansion in West and South 2. India going through once in a countr
Slide 47: Ongoing infra projects to supercharge Palava's growth
Ongoing infra projects (Airport, Metro, Bullet Train etc.) to supercharge Palava’s growth Virar Extended Eastern Mumbai – Ahmedabad Suburbs High-Speed Rail (CY28/29) Virar – Alibaug Multimodal 1st station after BKC at Palava, Extended Western Corridor (CY30) travel time -20 mins Suburbs Puts Palava
Slide 48: Recurring Cash-flow generation through land monetization
Recurring Cash-flow generation through land monetization ✓ ~400 acres land monetized till date from land sales to industry ✓ Leading players from warehousing, sports retailing, pharma, cooling product, 3-PL, cold chain, specialty petroleum product, oil field service industries, specialty paint have
Slide 49: 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 50: Pune – Will contribute to growth in a sustainable manner
Pune – Will contribute to growth in a sustainable manner Accelerating growth in INR 550bn 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
Slide 51: Bengaluru – Good start to two pilot projects
Bengaluru – Good start to two pilot projects in Bengaluru Market size: INR ~550bn Micro-market Market Size (INR bn) 1 South 210.0 2 East 170.0 3 North 125.0 4 West 40.0 5 Central 5.0 Total 550.0 Launched two projects in FY24, Mirabelle & Azur; Both received phenomenal response Source: Anarock, 2023
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 and leading non-listed developers 60% >50% 33% Incremental supply from Developers count branded developers 2x Remaining
Slide 53: Steady as it goes: 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 Jun’24 Commodity/Component % Share in total cost % Change Weighted Impact % Change Weighed Impact Steel 12.9% 35.1% 4.5% 0.0% 0.0% Flooring Tiles 5.0% 23.9% 1.2% 15.3% 0.8% Electrical/Plumbing 11.8% 10.1% 1.2% 8.4% 1.0%
Slide 56: 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 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) — Q1 FY2025 Earnings Presentation on 6ix