Motilal Oswal's research report on Macrotech Developers
LODHA reported an improved performance in 4QFY22 across all metrics, with its best-ever quarterly and yearly bookings and strong collections, leading to a steady reduction (INR6b) in net debt to INR93b. As it closed FY22 on a high note, the management has set a pre-sales target of INR115b in FY23, up 27% YoY. It aims to generate INR60b of operating cash flows, which will help it reduce its net debt to sub-INR60b. We lower our FY23 pre-sales marginally (2%) to incorporate lower than estimated launches, but improve our collections and operating cash flows by 15% and 30%, respectively, on better collection efficiency. We increase our risk-free rate assumption to 7.1% from 6.5%, leading to a higher WACC. We base our net debt assumption on FY23 (from FY24) for the purpose of NAV calculation as net debt is expected to sustain at the FY23 run-rate.
Outlook
As a result, our TP reduces by 8% to INR1,570 (an upside potential of 55%). We reiterate our Buy rating.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!