Motilal Oswal Sees 73% Upside in Lodha Developers: A Multibagger Real Estate Play

Motilal Oswal Financial Services (MOFSL) has initiated coverage on Lodha Developers (LODHA) with a BUY recommendation and a target price of INR 1,888, implying a 73% upside from the current market price of INR 1,091. The brokerage’s conviction is anchored in Lodha’s accelerating presales momentum, disciplined balance sheet management, expanding multi-city footprint, and rising annuity income from commercial, industrial, and data center assets.

MOFSL characterises Lodha’s current phase as a “market arrival moment” — transitioning from a Mumbai Metropolitan Region (MMR)-centric developer into a scaled, multi-market institutional real estate platform.

Lodha’s core residential business remains the primary growth engine. The company has delivered a 31% CAGR in presales since FY21, with FY25 presales reaching INR 17,630 crore, comfortably exceeding guidance. Despite a softer first half in FY26 due to fewer launches, presales of INR 9,020 crore in 1HFY26 already account for 43% of the full-year target.

MOFSL expects presales to grow at a 22% CAGR over FY25–FY28, reaching INR 31,700 crore by FY28, supported by:

- A robust launch pipeline of ~31 million square feet over FY25–FY28 - Record quarterly presales of INR 6,000 crore expected in both Q3 and Q4 FY26 - A sustainable INR 5,000 crore+ quarterly run rate from FY26 onwards

Importantly, Lodha continues to add projects even while scaling sales. In H1 FY26 alone, the company secured INR 25,000 crore of GDV, equal to its full-year guidance.

Lodha remains the market leader in MMR with a 10% share, benefiting from redevelopment-led supply, infrastructure upgrades, and strong pricing power. Absorption has consistently exceeded supply, keeping inventory at manageable levels (~16.6 months).

Pune has emerged as a key growth lever. Lodha ranks 2 in Pune with a 5% market share, and MOFSL expects 40% YoY sales growth to INR 3,500 crore in FY26. Low inventory, steady pricing, and strong end-user demand support sustained expansion.

Bengaluru marks Lodha’s most significant upside optionality. The company’s market share has risen from a low base to 2%, with management targeting 12% by FY31. In H1 FY26:

- Launch contribution jumped from 8% (FY25) to 25% - Sales contribution surged from 4% to 22%

With ~INR 16,000 crore GDV already secured, an additional INR 8,400 crore pipeline, and a 70-acre flagship project under preparation, Bengaluru is poised to be Lodha’s next large growth engine.

Lodha is entering Delhi NCR through a capital-light, pilot-led approach, beginning with two Gurugram projects (INR 3,600 crore GDV) in partnership with MRG Group. The appointment of a seasoned CEO–NCR underscores management’s long-term intent while maintaining execution discipline.

Palava township is evolving into a multi-asset, annuity-rich platform:

- Residential sales expected to reach INR 8,000 crore annually over the next decade - 50% EBITDA margins from premium villas and township formats - Emerging as a data center hub, with land deals closing at INR 12–21 crore per acre

Infrastructure catalysts — notably the Airoli–Katai tunnel (FY26), Navi Mumbai Airport, and the Bullet Train corridor — are expected to drive a 20% uplift in sales and sustained long-term value creation.

Lodha Developers’s commercial and industrial portfolio is becoming increasingly material:

- Net lease income of INR 690 crore by FY28, growing at 23% CAGR - Industrial and warehousing revenue projected at INR 1,220 crore, with EBITDA margins of ~76% - Strong tenant roster including global hyperscalers and marquee corporates

By FY28, the annuity portfolio is expected to be ~85% leased, providing stability and valuation support.

A key pillar of MOFSL’s bullish view is Lodha’s improving cash flow visibility:

- Collections projected to rise to INR 29,400 crore by FY28 - Operating cash flow expected to grow at 26% CAGR to INR 13,300 crore - Net debt-to-equity at 0.25x in H1 FY26, despite aggressive business development - Management expects net cash position by FY27

This allows Lodha to fund land acquisitions, construction, and expansion without incremental leverage, a critical differentiator in a consolidating sector.

MOFSL forecasts steady financial compounding:

| Metric | FY25 | FY28E | |---------------|-------|--------| | Revenue | 13,800| 19,300 | | EBITDA | 4,000 | 5,500 | | EBITDA Margin | 28.9 | ~29 | | PAT | 2,800 | 4,300 | | ROE | 14.6 | ~15 |

PAT is expected to grow at a 16% CAGR, driven by operating leverage, stable margins, and declining interest costs.

MOFSL values Lodha using a Sum-of-the-Parts (SoTP) framework:

- Residential business (DCF): INR 54,900 crore - Palava land monetization: INR 63,700 crore - Commercial assets: INR 3,000 crore - Industrial segment: INR 15,400 crore

This yields a net asset value (NAV) of INR 1,34,500 crore. Applying a 40% premium for scale, execution quality, and growth visibility results in a target price of INR 1,888 per share.

Lodha Developers launched its IPO in April 2025, with an issue size of INR 2,500 crore. The IPO consisted entirely of a fresh issue and was subscribed 1.36 times. The shares were listed at a 4.27% discount to the issue price of INR 486.

However, the story did not end there. After remaining in a consolidation phase for nearly two years post-listing, Lodha Developers’ stock gained significant momentum, reaching its all-time high of INR 1,594.80 on 21 June 2024. This represents an impressive 556.29% increase over its adjusted allotment price of INR 243, following a 2:1 stock split that took place on 31 May 2023.

Currently, the shares are trading at approximately INR 1,091, reflecting a correction of around 31% from their all-time high.

MOFSL highlights three principal risks:

1. Slower residential absorption 2. Delays in monetisation of new projects 3. Slower-than-expected convergence of business development investments

MOFSL’s coverage on Lodha Developers underscores the company’s transformation into a national, institutionally credible real estate platform. With strong presales visibility, expanding geographic reach, rising annuity income, and disciplined capital allocation, Lodha stands well-positioned to benefit from India’s structural real estate upcycle and sector consolidation.

As MOFSL puts it, Lodha’s journey reflects “strength, acceleration, and market arrival” — and at current valuations, the brokerage believes the market has yet to fully price in this transition.