Macrotech Developers (LODHA) achieved its best ever July-September sales bookings in Q2FY23 worth Rs31.5bn (Isec estimate of Rs27.5bn) which was driven by a combination of monetization of ready/completed inventory and new launches. The company has given FY23 sales booking guidance of Rs115bn (Isec estimate of Rs110bn) and we believe that the sales guidance is achievable given that the company has already achieved H1FY23 sales bookings of Rs60.0bn (52% of FY23 guidance) in a seasonally weaker period where the April-September period typically accounts for 40-45% of annual sales. The company’s India business net debt reduced by Rs0.6bn QoQ to Rs88.0bn as of Sep’22 while in its London investments, the company has repaid USD225mn bonds ahead of schedule and has no further obligation on its India balance sheet towards its London investments.
We retain our BUY rating with an unchanged target price of Rs1,348/share. Key risks are demand slowdown in the MMR market and rising interest rates.