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Informist, Thursday, Oct. 24, 2024

 

By Rajesh Gajra

 

MUMBAI – After an exceptionally strong annual revenue and net profit growth momentum in the June quarter, Macrotech Developers Ltd. may see a slight slowing in the quarter ended September although the growth numbers would still be higher than in the few quarters preceding Apr-Jun. However, in terms of pre-sales and customer collections received in the September quarter, which the company disclosed earlier this year, there was a slight uptick.

 

The company may have faced price growth challenges in the September quarter, given the fact that its Managing Director and Chief Executive Officer Abhishek Lodha had said in the post-June quarter earnings analyst call in July that, in Apr-Jun, the price growth was about 2%. The company's price growth guidance for full year 2024-25 (Apr-Mar) is 5-7%.

 

Developing and selling real estate through its brand name Lodha, Macrotech Developers will likely report a consolidated net profit of INR 4.41 billion, up 2.2 times on year and down 7.1% on quarter, according to an average of estimates from five brokerages. The estimates ranged from a low of INR 2.24 billion to a high of INR 5.25 billion. The slight momentum downtick is seen in the fact that the 2.2-times growth in the expected net profit is lower than the reported growth of 2.7 times on year in the June quarter.

 

The consolidated revenue of the company for Jul-Sept is seen at INR 28.16 billion, up 61% on year and down 1.1% sequentially. The revenue estimates ranged from a low of INR 19.18 billion to a high of INR 31.31 billion. Revenue momentum will be down slightly if the company's actual number matches the estimate since 61% growth is lower than the 76% on-year rise in the June quarter.

 

The operating profit, as denoted by earnings before interest, tax, depreciation, and amortisation, will likely be INR 7.28 billion in the September quarter, according to an average of estimates from four brokerages. The estimates ranged from a low of INR 4.92 billion to a high of INR 8.71 billion.

 

Brokerage Kotak Securities' Institutional Equities Research expects the company's revenue to be INR 29 billion "owing to modest deliveries during the quarter; healthy pre-sales... aided by liquidation of extant inventory and land sales at Palava". Macrotech's pre-sales in Jul-Sept were INR 42.9 billion, up 21.5% on year, and higher than the 20.3% growth in the previous quarter. Customer collections in the September quarter were up 11.6% on year to INR 30.7 billion, which is below the 12.1% growth on year in the same during the June quarter.

 

On the profitability front, brokerage Motilal Oswal Financial Services expects the operating margin to move up to 24.7% in Jul-Sept from 23.8% in the year-ago quarter. Sequentially, however, the brokerage sees the margin shrinking to 24.7% from 26.6%. Kotak Institutional Equities estimates the Jul-Sept operating margin to be 27%.

 

Compared to the company-given adjusted EBITDA margin figure of 31.4% in the year-ago quarter, brokerage Motilal Oswal Financial expects it to have fallen to 24.7% in the September quarter. Kotak Institutional Equities, however, sees the adjusted EBITDA margin coming in at 30% in Jul-Sept. After FY24 ended, Macrotech Developers had guided for a 31% adjusted EBITDA margin for FY25.

 

The company will detail its earnings Friday. Post the results, investors will be looking out for the management's commentary on demand going forward, and whether there was a risk of prices having peaked.

 

At 1107 IST, shares of Macrotech Developers traded at INR 1,062.75, down 2.3% over Wednesday's close, on the National Stock Exchange. Following are the Jul-Sept consolidated earnings estimates for Macrotech Developers based on estimates from five brokerages:

 

Brokerage	Net sales	Net profit	EBITDA
	------------(In INR million)----------
Elara Securities (India) Pvt Ltd	19,184	2,244	4,920
HDFC Securities Ltd	31,312	5,251	8,707
Kotak Institutional Equities	29,116	5,008	7,803
Motilal Oswal Financial Services Ltd	31,124	4,547	7,677
Sharekhan Ltd	30,050	5,020	---
Average	28,157	4,414	7,277

 

 

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Namrata Rao

 

 

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