Brokerages Bullish on Macrotech Developers: Q2 Update Boosts Stock by 4%
Mumbai, real estate, commercial building. Macrotech Developers Limited (MDL) reported strong pre-sales and collections in Q2FY25, leading to a 4.32% surge in share prices. Analysts recommend a 'Buy' rating.
Real EstateMacrotech DevelopersQ2fy25Stock MarketBrokeragesReal Estate MumbaiOct 07, 2024
Collections also saw a significant increase, reaching Rs 30.7 billion, a 11% Y-o-Y rise. The company further expanded its portfolio by adding four projects in Pune and Bengaluru, contributing to a total business development figure of Rs 166 billion for the first half of the fiscal year.
Despite a net debt increase to Rs 49.2 billion, the company’s debt-to-equity ratio remains healthy at 0.5x. On the stock market, Macrotech Developers shares surged 4.32%, hitting an intraday high of Rs 1,222.55. Analysts from various brokerages have issued 'Buy' ratings for the stock, with target prices set at Rs 1,600 from Nomura and Rs 1,795 from Nuvama.
Analysts are confident in MDL’s resilience and growth potential, attributing it to the company's effective market strategies and ongoing opportunities in digital infrastructure. Nomura’s outlook is particularly positive, citing several key factors
1. Granular Sales Strategy MDL’s sales strategy is highly focused, enabling it to capitalize on specific micro markets through its ‘supermarket’ approach.
2. Township Business Potential The township business in the extended eastern suburbs of Palava and Thane is poised for a rerating due to expected infrastructure upgrades and a premiumisation strategy that should drive price growth.
3. Business Development Targets MDL has a significant potential to surpass its business development targets, supported by strong operating cash flow and a relatively low level of net debt.
Analysts at Nuvama also highlighted the growth opportunities for organized players like MDL due to RERA-driven consolidation. The revival in housing demand, MDL’s strong position in the Mumbai Metropolitan Region (MMR), healthy sales, solid business development, and efficient inventory management are expected to result in robust cash flows.
Furthermore, Nuvama noted that faster land monetisation at Palava and ongoing portfolio expansion and geographical diversification could serve as additional catalysts for stock performance. In terms of valuation, Nomura reported that MDL shares are currently trading at 31x FY25F Ev/Ebitda, compared to a range of 20-51x for FY23 and 37-60x for FY24.
At 9 47 AM, shares of Macrotech Developers were trading 2.42% higher at Rs 1,200.20 per share. In comparison, the BSE Sensex was trading 0.31% higher at 81,942.36 levels.
Macrotech Developers Limited (MDL) is one of India’s leading real estate development companies, known for its innovative and sustainable townships and commercial projects. With a strong presence in major cities across India, MDL continues to grow and adapt to market trends, ensuring long-term value for its stakeholders.
Frequently Asked Questions
What were the pre-sales of Macrotech Developers in Q2FY25?
Macrotech Developers reported record pre-sales of Rs 42.9 billion in Q2FY25, marking a 21% year-on-year (Y-o-Y) growth.
How much did the collections increase in Q2FY25?
Collections increased to Rs 30.7 billion, marking an 11% Y-o-Y increase.
What is the current debt-to-equity ratio of Macrotech Developers?
Despite a net debt increase to Rs 49.2 billion, the company’s debt-to-equity ratio remains healthy at 0.5x.
What are the target prices set by Nomura and Nuvama for Macrotech Developers?
Nomura has set a target price of Rs 1,600, while Nuvama has set a target price of Rs 1,795 for Macrotech Developers.
What are the key factors driving Nomura's positive outlook on Macrotech Developers?
Nomura’s positive outlook is driven by MDL’s granular sales strategy, potential for township business in Palava and Thane, and the company’s ability to surpass business development targets with strong operating cash flow and low net debt.
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