ICICI Securities has given a 'buy' rating on Macrotech developers with a target price of ₹1,348/share, implying an upside potential of 24% from the last closing price.
Shares of Macrotech developers ended at ₹1,088.35 on the BSE in Friday's trade, down 1.32 per cent from the previous close. At the time of writing, the stock was trading at 43.65 times its trailing 12-month EPS of ₹24.97 per share and 4.37 times its book value.
Macrotech Developers' shares have been under sell-off pressure after rising to a 52-week high of ₹1,539/apiece in December 2021. The stock is down 30% from its 52-week high. However, the stock delivered a return of 59% over the last one-year period as compared to a 1.47% rise in the Nifty midcap 100.
Further, the stock has risen 10% since the announcement of a 15% export duty hike on a range of finished steel products.
Macrotech Developers is a real estate firm. It has a major presence in the Mumbai Metropolitan Region (MMR) and in the Pune market. The company has recently forayed into Bengaluru. Macrotech Developers' products are sold under the Lodha brand.
The company achieved its best-ever April-June sales bookings in Q1FY23 worth ₹2,814 crore, which is the highest quarterly sales booking clocked by the company till date for the April-June period. In India, business collections for Q1FY23 stood at ₹2,620 crore(up 53% YoY), according to ICICI securities.
The company’s India business net debt was reduced by ₹440 crore QoQ to ₹8,860 crore in Jun ’22 from ₹9,300 crore in Mar 22. The company has guided for a pre-tax operational surplus of ₹6000 crore in FY23E, and post interest cost of ₹800 crore and ₹2000 crore of business development spend, the company plans to utilise the balance surplus of over ₹3000 crore to bring down Indian business net debt levels to below ₹6000 crore, excluding any surplus received from the UK in FY23E of ₹1500 crore, said ICICI Securities in a report.
"We believe that the company is now "off the treadmill" as strong operating cash flows, reduced interest costs (mainly owing to absolute debt reduction) and asset-light land bank additions will likely result in organic net debt reduction over FY23-24E," said ICICI Securities.
Post listing in Q1FY22, the company has added new projects having a total saleable area of 8.8 msf having an estimated GDV of ₹14,600 crore in FY22, the majority of which are slated for FY23E launch.
The brokerage firm estimates sales bookings of Macrotech Developers at ₹11,000 crore in FY23E versus company guidance of ₹11,500 crore ( ₹10,500 crore from core residential business and ₹1000 crore from non-core business) and ₹11,900 crore in FY24E. It said the company is targeting adding new projects having a GDV of ₹115 crore in FY23E of which it has signed 3 new JDA projects in Q1FY23 having 5.1msf of a saleable area with an estimated GDV of ₹6,200 crore and has also announced its foray into the Bengaluru market by signing its first project having a GDV of ₹1,200 crore.
In Q4FY22, the company's consolidated net profit surged 72.4% to ₹535.46 on a 36% jump in net sales to ₹3,444.56 over Q4FY21.
Profit before tax (PBT) increased by 44.7 per cent in Q4 March 2022, to ₹802.30 crore, from ₹554.50 crore in Q4 March 2021. Total expenses, on the other hand, increased by 31.95 per cent in Q4 March 2022 to ₹2714.10 crore, up from ₹2056.90 crore in Q4 March 2021.
It reported a consolidated net profit of ₹1208.51 crore in FY22, compared to a net profit of ₹47.89 crore in FY21. In FY22, revenue from operations increased by 69.58 percent to ₹9233.20 crore.
An average of 16 analysts polled by MintGenie have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
