Shares of Macrotech Developers, a real estate firm, fell nearly 2 percent to 1,086 apiece in Thursday's intra-day trade after rallying 8.53 percent in the previous three trading sessions.
The stock witnessed sharp volatility in 2022, hitting its one-year high and low in February and May, respectively. At current levels, the stock is trading 33.41 percent above its 52-week low of Rs. 814.2.
Despite a strong surge from its one-year low, brokerage firm ICICI Securities is bullish on the stock and retained its "buy" rating with a target price of ₹1,304 apiece, indicating a further upside of 17.90 percent from the stock's previous closing price.
The brokerage stated that the company achieved its best-ever October-December sales bookings in Q3FY23 worth Rs. 3,040 crore, driven by a combination of monetization of ready and completed inventory and new launches.
The company is very well on track to achieve its FY23 sales booking guidance of ₹11,500 crore, as the firm already achieved 9MFY23 sales bookings of ₹9,040 crore, which is 79 percent of FY23 guidance, it added.
In Q3 FY23, the company's net debt for its India business fell by Rs. 750 crore QoQ to Rs. 8,040 crore. The net debt reduction is primarily due to higher Q3FY23 collections of Rs. 2,680 crore, up 13 percent QoQ and a reduction in interest costs.
“We await the company’s guidance on exit net debt for March 23 (earlier guidance was for Rs. 6,000 crore of exit net debt), which is contingent on the trajectory of cash flows and business development activities combined with leased asset monetization of offices and malls fructifying,” said ICICI Securities.
Macrotech Developers got listed on the stock exchanges in April 2021 after raising ₹2,500 crore through its initial public offering (IPO). The stock is currently trading 127.57 percent higher than its issue price of ₹486 apiece.
For the September quarter, the company posted a net loss of ₹933 crore compared to a net profit of ₹223.36 crore in the corresponding quarter of the last fiscal year. The total revenue from operations also saw a 16.90 percent drop to ₹1,765 crore from ₹2,124 crore in Q2 FY22.
The company's losses were attributed to provisions made for loans given to its British arm for the development of projects. “The group had given loans to Lodha Developers UK Ltd. and its subsidiaries from time to time for UK projects and has accrued interest thereon," the company said in the earnings call.
"The current economic uncertainty in European countries, alongside adverse geopolitical developments, high inflation coupled with a recessionary economic outlook, has led to a reduction in the expected realisable value of outstanding loans along with accrued interest," the company added.
Meanwhile, promoters of the company raised ₹3,547 crore through the sale of a 7.2 percent stake in the company to institutional investors to achieve the minimum public shareholding norm of 25 percent. Post-transaction, the promoter stake in the company stood at 75 percent in Q3 FY23, down from 82.2 percent in Q2 FY23.
Macrotech Developers, which sells properties under the "Lodha" brand, is one of the leading real estate developers in the country. The company has a major presence in the Mumbai Metropolitan Region (MMR) and Pune property markets, while it recently made an entry into the Bengaluru market with one housing project.
Macrotech Developers has delivered more than 89 million square feet of real estate and is developing around 100 million square feet under its ongoing and planned portfolio.
15 analysts polled by MintGenie on average have a 'hold' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
