Buy Sri Lotus Developers & Realty Ltd for the Target Rs 230 by Motilal Oswal Financial Services Ltd
Growth visibility remains strong
LOTUSDEV reported a strong operational performance in 1QFY27, with presales increasing 5.7x YoY to INR4.1b, 37% above our estimate. Lotus Celestia, launched in Mar’26, was the key contributor, accounting for ~68% (INR2.7b) of quarterly pre-sales. In 1QFY27, the company launched Lotus Trident (Andheri West) and Lotus Aquaria (Prabhadevi), with a combined GDV of INR13.5b. As both projects were launched toward the end of June, their contribution to 1QFY27 pre-sales was limited. However, we expect strong contribution from these projects in 2Q.
BD continues; upcoming launches to propel pre-sales growth
The company has a healthy pipeline of projects, with four launches planned over the remaining of FY27—Lotus Aurelia (Bandra), Lotus Sky Plaza (Prabhadevi), Lotus Portfino (Versova), and Lotus Odyssey (Andheri West) aggregating INR35-40b of GDV. As of 1QFY27, the company had a residential portfolio comprising ongoing projects with a GDV of INR45-47b and an upcoming pipeline with a GDV of INR75-78b. The company also has an upcoming commercial portfolio with a GDV of INR47-52b. Additionally, it recently secured a commercial redevelopment project in Juhu with a GDV of INR16b. Collectively, these projects offer a pre-sales potential of INR180-190b, providing a comfortable growth visibility over the medium term. We bake in a 56% CAGR in pre-sales over FY26-28E, reaching INR28b
Strong collections; balance sheet remains sturdy
Collections more than doubled to INR1.5b (+114% YoY) in 1QFY27, which was in line with our estimates. With healthy progress in the construction activity and upcoming launches, we expect collections to post a 93% CAGR, reaching INR14b over FY26-28. LOTUSDEV has maintained a robust balance sheet, with net cash standing at INR6.2b as of 1QFY27.
Valuation and view
* LOTUSDEV delivered a 59% pre-sales CAGR over FY22-26. With a healthy project pipeline, pre-sales and collections are expected to remain at a higher level over the medium term. Further, the company has continued its business development efforts, and we expect more projects to be added in the coming quarters, providing further growth visibility.
* Hence, we assign a 50% NAV premium to reflect the company’s future growth potential and reiterate our BUY rating with a TP of INR230, indicating a 19% potential upside.
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