IGI Logo

Macrotech Developers (MDL) continues to see strong traction across its core MMR as well as newly entered Pune geography and delivered yet another strong quarter. In 3QFY23, booking values grew to INR 30.3bn (+16% YoY; down 4% QoQ; likely to exceed full year guidance of INR 115bn; INR 90.4bn in 9MFY23) aided by launches worth INR 110.4bn in 9MFY23. Consolidated net debt reduced on a QoQ basis to INR 80.42bn (INR 87.96bn in 2QFY23) led by internal accruals. Going forward, net debt is likely to trend towards INR 70bn by Mar’23 (earlier guidance of INR 60bn). Further, MDL has added 4 new projects (5.1msf of saleable area; GDV of INR 85bn) across MMR and Pune and has exceeded guidance of INR 150bn of GDV acquisition in FY23 (INR 178bn in 9MFY23). We remain positive on Macrotech as it continues to execute well across ticket prices and micro-markets and has substantial projects on owned land leading to higher margins and sustained launch momentum. We maintain ‘BUY’ rating with a Sep’23 TP of 1,425 (implying 32% upside).

*On course to exceed INR 115bn sales guidance:

In 3QFY23, Booking values grew to INR 30.3bn (+16% YoY; down 4% QoQ; likely to exceed full year guidance of INR 115bn according to MDL; with broad based momentum across micro-markets). Top micromarkets contributing to sales were South & Central (INR 10.9bn; +12% YoY; down 2% QoQ on a very high base) and Pune (INR 5.7bn; +285% YoY; +256% QoQ). Extended Eastern suburbs (INR 5.5bn; down 14% YoY; +22% QoQ) has a run-rate of c.INR 25bn annual booking values which augurs well from land monetisation perspective. Est. EBITDA margin for the bookings done this quarter was at 31%.

* Launch pipeline extremely strong:

In 3QFY23, Macrotech launched INR 25.6bn worth of inventory (2.3msf) including Park Signet, Vikhroli Signet, a plotted development in Palava, Lodha Woods, all in MMR, and Bella Vita (phase 2), Giardino in Pune. It plans to launch another INR 57.6bn (4.2msf) in 4QFY23 led by large projects in South Central region and Extended Eastern Suburbs.

* Going strong on business development:

In 3QFY23, MDL has added 4 new projects having c.5.1msf of saleable area (GDV of INR 85bn across MMR and Pune). Projects added were i) MMR, Eastern Suburbs (1.7msf; INR 43bn of GDV), ii) MMR, Eastern Suburbs (0.4msf; INR 11bn), iii) MMR, Eastern Suburbs (0.4msf; INR 11bn) and iv) Pune – North East (2.6msf; INR 20bn). Total projects added/acquired in 9MFY23 stands at 12.5msf with an estimated GDV of INR 178bn (exceeded FY23 guidance of INR 150bn).

* Debt reduction to INR 70bn by Mar’23:

MDL is likely to bring down debt to INR 70bn by FY23 end (earlier FY23 guidance of INR 60bn).Consolidated net debt has reduced marginally on a QoQ basis to INR 80.42bn (INR 87.96bn in 2QFY23). Average exit cost of debt has come down from 9.9% in 2QFY23 to 9.7% 3QFY23. The downward trajectory in interest costs is expected to continue even in 4QFY23.

Maintain ‘BUY’ with a Sep’23 TP of INR 1,425

We remain positive on MDL as it continues to execute well across ticket prices and micro-markets. We maintain ‘BUY’ with a Sep’23 TP of 1,425 (implying 32% upside). Key Risks: slowdown in residential segment.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.jmfl.com/disclaimer

SEBI Registration Number is INM000010361

Above views are of the author and not of the website kindly read disclaimer