Buy Sri Lotus Developers and Realty Ltd for the Target Rs. 250 by Motilal Oswal Financial Services Ltd
Upcoming launches expected to lift performance
Operating performance
* Sri Lotus Developers & Realty (LOTUSDEV) recorded presales of INR2.6b, up 126%/4x YoY/QoQ in 2QFY26 (7% above our estimate). In 1HFY26, its presales jumped 50% YoY to INR3.2b.
* The company launched two projects during the quarter: The Arcadian (Juhu) and Amalfi (Versova), with a total GDV of INR10b and 0.2msf area. These new launches contributed to ~51% of total presales (INR920m from Arcadian and INR380m from Amalfi).
* LOTUSDEV plans to launch four projects in 2HFY26: Project Varun (Bandra), Lotus Aquaria (Prabhadevi), Lotus Celestial (Versova), and Lotus Trident (Andheri West). Of these, Project Varun is likely to be launched in 3QFY26.
* LOTUSDEV achieved collections of INR1.1b in 2QFY26, up 16%/51% YoY/QoQ (60% below our estimate). In 1HFY26, collections were INR1.8b, up 4% YoY.
* In 1HFY26, the company added six projects in the premium micro markets of MMR (of which two were added in 2QFY26). These projects are Lotus Portifino (Versova), Lotus Sky Plaza (Oshiwara), Lotus Odyssey (Bandra), Lotus Avalon (Juhu), Lotus Imperial (Bandra), and Lotus Upper Crest (Bandra).
* The company deployed INR1.4b in Amalfi, Arcadian, and Varun as of 30th Sep’25 from the primary fund raised.
* LOTUSDEV is currently executing six projects with a total saleable carpet of 0.36msf and a potential GDV of INR27-28b. It has another nine projects in the residential pipeline with a total saleable carpet of 0.93msf and a potential GDV of INR73-78b. It also has three commercial projects with a total saleable carpet of 0.77msf and potential GDV of INR30-35b.
* P&L performance: Its 2QFY26 revenue stood at INR1.8b, up 43%/2.8x YoY/QoQ (35% below our estimate). In 1HFY26, its revenue stood at INR2.4b, down 2% YoY.
* LOTUSDEV’s EBITDA stood at INR504m, -23%/+71% YoY/QoQ (49% below our estimate), with an EBITDA margin of 29%. In 1HFY26, its EBITDA stood at INR799m, down 33% YoY, with a margin of 34%.
* LOTUSDEV’s adjusted PAT came in at INR462m, -8%/+80% YoY/QoQ (38% below our estimate) with an Adj. PAT margin of 26%. In 1HFY26, PAT stood at INR718m, down 21% YoY, with a margin of 30%.
Valuation and view
* LOTUSDEV posted a 39% presales CAGR over FY22-25, which is expected to accelerate to 129% over FY25-28 to reach INR59b. This will be guided by its robust project pipeline and strong response to launches. Collections are also expected to clock 129% CAGR and reach INR40.2b by FY28E.
* Additionally, backed by its best-in-class execution capabilities, the company is likely to achieve an operating margin of 47% and a net profit margin of 36% in FY28E.
* We reiterate our BUY rating on the stock with a TP of INR250, indicating a 45% potential upside.
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