Why Macrotech Developers is the Talk of the Town on Dalal Street
Macrotech Developers, formerly known as Lodha Developers, has emerged as one of Mumbai's top real estate developers, known for its 'Lodha' brand properties. The company has developed over 65,000 residential units across major cities in India and is now ex
Macrotech DevelopersReal EstateMumbaiLodha GroupStock MarketReal Estate MumbaiJan 26, 2025
The company began its operations in Mumbai, focusing on affordable housing projects in the suburbs.
Over time, it expanded its reach to other regions like the MMR and Pune.
Known for its 'Lodha' brand properties, Macrotech has become a top developer in Mumbai.
It has successfully delivered over 65,000 residential homes in cities such as Mumbai, Thane, Hyderabad, Pune, and even in international locations like London.
The company is also planning to venture into the real estate markets of Gurugram and Ahmedabad in the coming months.
Macrotech Developers is not just limited to residential projects; it also develops commercial real estate as part of mixed-use developments.
By March 2024, the company had delivered over 100 million square feet of properties across nearly 40 projects.
This includes large residential projects catering primarily to the middle-income segment of society.
The company's flagship project, Palava City, is a 4,500-acre mega township near Kalyan in Maharashtra.
This project is anticipated to generate an annual revenue of Rs 80 billion over the next two years.
Since the first COVID-19 lockdown in 2020, the Indian real estate market has shown resilience and has been on an uptrend in most areas.
Macrotech Developers, with its strong market position, has benefited significantly from this growth.
The company expects its revenue and profits to align with the steady growth of the Indian economy.
However, the company's stock performance has been volatile, especially over the past year, failing to deliver gains.
A recent legal battle has cast a shadow over the stock.
Abhishek Lodha, the Managing Director of Macrotech, has filed a Rs 50 billion lawsuit against his younger brother's firm, the House of Abhinandan Lodha (HoABL), for the unlawful use of the 'Lodha' brand name.
This case, which will be heard in the Mumbai High Court, highlights the significance of corporate governance in family-owned businesses.
The dispute centers around the use of the 'Lodha' trademark, which was previously shared by all companies in the Lodha Group.
In 2015, Abhinandan Lodha separated from the Lodha Group to start his own business, but the agreement on the use of the brand name has been a point of contention.
The stock has recently come under pressure, falling from around Rs 1,500 to Rs 1,100, possibly due to market concerns or broader market weakness.
The potential fallout from the court case is a significant worry for investors.
Financially, Macrotech Developers has shown robust performance.
In FY24, the company's operating income increased by 8.9% year-on-year.
The operating profit margin improved to 8.6% from 7.7% in FY23, and the net profit margin grew from 5.2% to 15.1%.
The net profit for the year was Rs 15.5 billion, a 217.5% increase from the previous year.
The company's long-term debt has also decreased, and its debt-to-equity ratio stands at a comfortable level.
Despite these positive financial metrics, the ongoing legal battle raises concerns about the company's future.
Corporate tussles are common in family-owned businesses, and they highlight the importance of robust corporate governance.
While Macrotech Developers is fundamentally strong, the risk associated with the legal dispute is a critical factor for investors to consider.
In conclusion, the legal battle may not have a material impact on the stock, but the question of risk is paramount.
Investors must weigh the potential risks against the company's strong fundamentals and growth prospects.
For more detailed information, refer to the Macrotech Developers company fact sheet and quarterly results.
Frequently Asked Questions
What is Macrotech Developers formerly known as?
Macrotech Developers was formerly known as Lodha Developers.
What is the company's flagship project?
The company's flagship project is Palava City, a 4,500-acre mega township near Kalyan in Maharashtra.
What is the legal dispute involving Macrotech Developers?
The legal dispute involves a Rs 50 billion lawsuit filed by Abhishek Lodha, the Managing Director, against his younger brother's firm, the House of Abhinandan Lodha (HoABL), for the unlawful use of the 'Lodha' brand name.
How has the company's stock performed recently?
The company's stock has been volatile, falling from around Rs 1,500 to Rs 1,100, possibly due to the legal dispute or broader market weakness.
What are the key financial metrics of Macrotech Developers for FY24?
In FY24, Macrotech Developers' operating income increased by 8.9% year-on-year, the operating profit margin improved to 8.6% from 7.7%, and the net profit margin grew from 5.2% to 15.1%. The net profit for the year was Rs 15.5 billion, a 217.5% increase from the previous year.
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