Motilal Oswal Sees 58% Upside in Lodha Developers as Housing Cycle Strengthens
Motilal Oswal has raised its target price for Lodha Developers, forecasting a 58% upside. The brokerage cites strong demand outlook and improved balance sheet visibility as key factors.
Real EstateLodha DevelopersMotilal OswalHousing MarketFinancial ServicesReal Estate NewsNov 19, 2025
Motilal Oswal said Lodha’s ability to sustain strong bookings, launch a deeper project pipeline, and accelerate debt reduction gives the stock a clearer medium-term growth path. It added that project additions across Mumbai Metropolitan Region and Pune have strengthened the development portfolio to more than Rs 3.7 lakh crore of potential gross development value.
The brokerage said the industry backdrop remains favourable as income growth outpaces property prices in several top-tier markets. According to its estimates, affordability in the Mumbai region has improved by 10 to 15% over the past four years, while annual supply has tightened. Lodha has seen the benefit 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. Collections are expected to climb to Rs 18,130 crore in FY26 from Rs 14,810 crore. Motilal Oswal said this steady growth in pre-sales and collections forms the backbone of Lodha’s cash flow cycle and supports higher launch activity.
The broader trend of consumers preferring established developers remains intact, 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 Rs 1.2 lakh crore in FY26. This includes expansions in Thane, Eastern suburbs, and South-Central Mumbai. The brokerage highlighted that the company’s addition of multiple redevelopment projects has created a diversified mix across price points. It also noted that the shift toward asset-light partnerships allows Lodha to lock in large volumes with limited balance sheet strain.
The report said launch momentum is essential because current execution strength allows the company to quickly convert planned projects into bookings. For FY25, the company has indicated more than 17 million square feet of launches, with further scope to scale up in FY26.
Motilal Oswal said 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.
According to Motilal Oswal, this lower leverage improves Lodha’s financial flexibility ahead of large redevelopment projects and shields the balance sheet during periods of uneven sales. It said consistent debt reduction has also strengthened the company’s cost of capital, which helps sustain margins.
The report added that Lodha’s cost focus and mix improvement in premium projects support operating profitability, even as the company deploys more capital in new launches.
The brokerage said Lodha’s product mix remains tilted toward established micro-markets, where price discipline is stronger. Across the Mumbai Metropolitan Region, mid-income and premium projects have seen better absorption than value housing. Lodha’s presence in these pockets allows it to maintain steady price growth without relying on heavy discounting.
According to the report, price appreciation in many of its markets has been measured, ranging from 4 to 6% annually, which the brokerage considers sustainable. It said this pricing stability gives Lodha the room to maintain margin visibility as construction costs remain in check.
Motilal Oswal said the 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. It noted that in Mumbai’s redevelopment segment, the share of top developers has increased significantly over the past few years.
The report expects this consolidation to continue as more homebuyers prioritize delivery certainty and after-sales service. Lodha stands to benefit from this trend as its brand recall and execution record remain strong.
The brokerage outlined several triggers that could lift Lodha’s valuation in the next 12 to 18 months. Faster pre-sales conversion from new launches, sustained affordability in key locations, and potential additions in redevelopment corridors could lift both earnings and visibility. Operating cash flow strength, coupled with the ongoing reduction in debt, can also improve the company’s return profile. Motilal Oswal believes the combination of higher scale and lower leverage places Lodha on a stronger footing for the next phase of the housing cycle.
Frequently Asked Questions
What is the target price set by Motilal Oswal for Lodha Developers?
Motilal Oswal has set a target price of Rs 1,888 for Lodha Developers, implying about 58% upside from the last traded price of Rs 1,197.
What factors are driving the optimism for Lodha Developers?
The brokerage cites strong demand outlook, improved balance sheet visibility, and a multi-year upcycle in branded housing as key factors driving optimism for Lodha Developers.
What is the expected net debt reduction for Lodha Developers?
Lodha’s net debt is expected to fall to Rs 3,600 crore in FY25 from Rs 7,040 crore in FY23, with a further reduction toward Rs 2,500 crore in FY26.
How has the product mix of Lodha Developers evolved?
Lodha’s product mix remains tilted toward established micro-markets, with a diversified mix across price points, including expansions in Thane, Eastern suburbs, and South-Central Mumbai.
What is the expected impact of the consolidation phase in the real estate sector?
The consolidation phase is expected to push branded players like Lodha to the forefront, especially in larger cities, as smaller developers face funding constraints and regulatory hurdles.
Related News Articles
India's Office and Workspace Real Estate Gains from GST Cuts on Construction
Bengaluru, NCR, Hyderabad, and Pune lead the expansion of India's office and workspace market, driven by demand from GCCs, IT services, and flexible workspaces. Recent GST cuts on construction materials are expected to boost the sector further.
Hazoor Multi Projects Ltd Declares Final Dividend Amid 69% Q4 Profit Drop
Despite a significant 69% decline in Q4 profit, Hazoor Multi Projects Ltd, a Maharashtra-based real estate developer, has declared a final dividend of ₹0.20 per share for FY25.
Nimbus Group Invests Rs 1,000 Crore in Luxury Housing Project in Noida
Nimbus Group, a prominent realty firm, is set to invest Rs 1,000 crore in a luxury housing project named 'Arista Luxe' in Sector 168, Noida. The project will feature 342 apartments and is expected to boost the local real estate market.