Motilal Oswal Projects 58% Upside in Lodha Developers as Real Estate Market Heats Up
Motilal Oswal Financial Services has raised its target price for Lodha Developers (formerly Macrotech Developers) to Rs 1,888, indicating a 58% upside from the last traded price of Rs 1,197. The brokerage cites a robust housing cycle, strong project additions, and improved affordability as key drivers.
Real EstateLodha DevelopersMotilal OswalHousing MarketMumbai Metropolitan RegionReal Estate MumbaiNov 19, 2025
Motilal Oswal highlighted that Lodha's ability to sustain strong bookings, launch a deeper project pipeline, and accelerate debt reduction provides a clearer medium-term growth path. The company has significantly strengthened its development portfolio through project additions across the Mumbai Metropolitan Region (MMR) and Pune, bringing the potential gross development value to more than Rs 3.7 lakh crore.
The industry backdrop remains favorable as income growth outpaces property prices in several top-tier markets. According to Motilal Oswal, affordability in the Mumbai region has improved by 10 to 15% over the past four years, while annual supply has tightened. Lodha has leveraged this trend through steady bookings and a wider funnel of planned launches. Quarterly pre-sales are expected to rise to Rs 18,000 crore in FY26 from Rs 14,520 crore in FY25, with collections expected to climb to Rs 18,130 crore in FY26 from Rs 14,810 crore. This steady growth in pre-sales and collections forms the backbone of Lodha’s cash flow cycle and supports higher launch activity.
The preference for established developers remains strong, which strengthens Lodha’s position in suburban micro-markets and branded mid-income projects. Lodha’s launch pipeline stands at Rs 98,000 crore in FY25 and is expected to grow to Rs 1.2 lakh crore in FY26. This includes expansions in Thane, Eastern suburbs, and South-Central Mumbai. The addition of multiple redevelopment projects has created a diversified mix across price points, and the shift toward asset-light partnerships allows Lodha to lock in large volumes with limited balance sheet strain.
Current execution strength enables the company to quickly convert planned projects into bookings. For FY25, Lodha has indicated more than 17 million square feet of launches, with further scope to scale up in FY26. Lodha’s net debt is expected to fall to Rs 3,600 crore in FY25 from Rs 7,040 crore in FY23, supported by higher operating cash flow and disciplined capital allocation. The company has guided for further reduction toward Rs 2,500 crore in FY26. Lower leverage improves financial flexibility and shields the balance sheet during periods of uneven sales. Consistent debt reduction has also strengthened the company’s cost of capital, helping to sustain margins.
Lodha’s cost focus and mix improvement in premium projects support operating profitability, even as the company deploys more capital in new launches. The company’s product mix remains tilted toward established micro-markets, where price discipline is stronger. Mid-income and premium projects in the MMR have seen better absorption than value housing. Lodha’s presence in these markets allows it to maintain steady price growth without relying on heavy discounting. Price appreciation in many of its markets has been measured, ranging from 4 to 6% annually, which Motilal Oswal considers sustainable.
The real estate sector is still in a consolidation phase, with many smaller developers facing funding constraints and regulatory hurdles. This has pushed branded players to the forefront, especially in larger cities. In Mumbai’s redevelopment segment, the share of top developers has increased significantly over the past few years. The trend of homebuyers prioritizing delivery certainty and after-sales service benefits Lodha, as its brand recall and execution record remain strong.
Motilal Oswal outlined several triggers that could lift Lodha’s valuation in the next 12 to 18 months. These include faster pre-sales conversion from new launches, sustained affordability in key locations, and potential additions in redevelopment corridors. Operating cash flow strength, coupled with ongoing debt reduction, can also improve the company’s return profile. The combination of higher scale and lower leverage positions Lodha on a stronger footing for the next phase of the housing cycle.
Frequently Asked Questions
What is Motilal Oswal's target price for Lodha Developers?
Motilal Oswal has set a target price of Rs 1,888 for Lodha Developers, indicating a 58% upside from the last traded price of Rs 1,197.
What are the key drivers for Lodha Developers' growth according to Motilal Oswal?
The key drivers for Lodha Developers' growth, as per Motilal Oswal, include a strong housing cycle, improved affordability in key cities, and a shift toward large developers.
How has Lodha's development portfolio been strengthened?
Lodha's development portfolio has been strengthened through project additions across the Mumbai Metropolitan Region (MMR) and Pune, bringing the potential gross development value to more than Rs 3.7 lakh crore.
What is the expected trend in pre-sales and collections for Lodha in FY26?
Quarterly pre-sales for Lodha are expected to rise to Rs 18,000 crore in FY26 from Rs 14,520 crore in FY25, and collections are expected to climb to Rs 18,130 crore in FY26 from Rs 14,810 crore.
What is the current trend in the real estate sector, and how does it benefit Lodha?
The real estate sector is in a consolidation phase, with many smaller developers facing funding constraints and regulatory hurdles. This trend benefits Lodha, as branded players like Lodha are moving to the forefront, especially in larger cities.
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