Lodha Developers' return of launch momentum excites investors
New Delhi, Nov. 3 -- Lodha Developers' stock rose over 6% on Tuesday, reacting to the management's upbeat commentary after its September quarter (Q2FY27) results. Lodha is bracing for a fast-paced H2FY27, backed by launches with a revenue potential of Rs.19,070 crore (11.1 msf, 17 projects). This is a marked improvement from launches worth Rs.4,080 crore in H1. The new launches are spread across Mumbai Metropolitan Region (MMR), Bengaluru, Pune and National Capital Region (NCR).
Q2FY27 pre-sales rose 10% year-on-year to Rs.5,037 crore, with Bengaluru fetching Rs.1,860 crore, a key highlight. Collections were flat at Rs.3,450 crore. Typically, one-third of quarterly pre-sales come from new launches and two-thirds from sales in existing projects. This time, the contribution from new launches was lower than one-third, but Lodha sees that improving in H2.
Lodha is aiming for six operating projects in Bengaluru and eyes pre-sales of Rs.3,000 crore from the city in FY27. Its foray into NCR through two joint development agreement (JDA) projects in Gurugram is seeing an encouraging initial response.
The Mumbai Airoli-Palava connector should be operational in Q3, aiding demand traction at the Palava township. Lodha's FY27 pre-sales target is Rs.24,000 crore, while it clocked Rs.9,670 crore in H1. JM Financial Institutional Securities is pencilling in H2 pre-sales of around Rs.14,300 crore.
On a like-to-like basis, so far in FY27, the Lodha portfolio has seen price appreciation of 4%. Going ahead, it anticipates 6% price growth against cost inflation of around 4%, thus aiding margins. Further, Lodha aims to scale up annual annuity income to Rs.3,000 crore by FY32 (including Rs.2,000 crore from data centres), from Rs.300 crore in FY26. Rental income from the data centre build-to-suit projects would begin contributing from FY29, adding a recurring earnings stream for the company.
Geographical diversification and a growing annuity portfolio are positives, but risks linger. Rising interest rates and dearer home loans have moderately affected sales in the Rs.1 crore-5 crore segment, but the luxury segment remains stable, the management said. The West Asia war is a modest drag, as NRI Gulf demand accounts for roughly 4-5% of Lodha's sales. However, Nuvama Research cautions that falling volumes in the MMR and affordability concerns in Gurugram pose challenges to Lodha.
So far in CY26, the Lodha stock is down around 1%, versus a 6% fall in the Nifty Realty index. Pre-sales velocity and monetisation of Palava land would decide the stock's future course.