Buy Lodha Developers; target of Rs 1375: Motilal Oswal

Motilal Oswal's research report on Lodha Developers

Lodha Developers (LODHA) added one project in MMR during 2QFY27, with 0.9msf of saleable area and an estimated GDV of INR48b. It has INR409b of launched inventory yet to be sold, which is expected to support sustenance sales. Further, a robust pipeline of INR191b is planned for launch in 2HFY27 across MMR, Bangalore, Pune and NCR. Beyond the next 12 months, LODHA would likely launch ~68msf (own land + JDA). Overall, the company has unsold GDV of ~INR2t (excl. land forming part of LandCo), which provides ample growth visibility for the medium term.

Outlook

While we have maintained our presales and collections estimates, we have increased the WACC rate of residential portfolio to 11.3% and cap rate for the annuity portfolio to 8.0%. Hence, the target price has declined to INR1,375. Reiterate BUY. LODHA is our preferred pick among large developers.