Lodha Developers Limited — Q4 FY25 earnings call

Call held 25 Apr 2025

Management summary

Lodha Developers delivered a strong Q4 and FY25, achieving record presales of INR 48.1 billion and INR 176 billion respectively, exceeding guidance. Profitability remained robust with a 33% EBITDA margin, and net debt was significantly reduced. The company is optimistic about future growth, driven by infrastructure development in key townships and a diversified sales strategy, despite a slightly lower-than-expected price growth in FY25.

Highlights

  • Achieved highest-ever quarterly presales of INR 48.1 billion in Q4 FY25, contributing to a 21% growth in FY25 presales to INR 176 billion, surpassing the 20% guidance.

  • Maintained strong profitability with an embedded EBITDA margin of 33% for FY25, exceeding the guidance of 30%.

  • Successfully added 10 new projects in FY25 with a Gross Development Value (GDV) of INR 237 billion, ahead of the INR 210 billion guidance.

  • Reduced net debt to INR 39.9 billion by end of FY25, resulting in a net debt to equity ratio of 0.2x, well below the 0.5x ceiling.

  • Reported robust collections of INR 144.9 billion for FY25, marking a 29% year-on-year growth.

Concerns

  • FY25 price growth of 4% was lower than the 5-6% guidance, attributed to a conservative approach amidst economic slowdown.

  • Operationalization of the Mulund-Airoli-Palava freeway experienced delays due to technical issues, though these are now resolved.

Key financials

3 periods

Headline

  • Revenue
    ₹13,768 Cr
    YoY +33%
  • Adjusted EBITDA
    ₹4,970 Cr
  • PAT
    ₹2,774 Cr
    YoY +72%

Q4 FY25

  • EBITDA Margin
    32%

FY25

  • EBITDA Margin
    33%

What they filed

Q1 FY27: revenue up 30.7%, net profit up 63.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,590 4,016 3,890 3,349 2,983 +15%4,307 +7%3,902 +0%4,378 +31%
EBITDA682 1,271 1,047 958 618 −9%1,328 +4%963 −8%1,525 +59%
Net profit393 832 742 644 336 −15%1,146 +38%794 +7%1,050 +63%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹17,600 Cr

as of 2025-03-31 quantified

21% YoY

Inflow this quarter

₹4,810 Cr

Composition

Mix 5 segments
  • Upper Mid-Income & Higher (Palava) 20%
  • Affordable 20%
  • Aspirational 50%
  • Premium 20%
  • Luxury 10%

Share of order book by segment· categories overlap, and sum to 120%

Pipeline

other

New GDV addition target for FY26

The company's diversified business model, with sales from new launches, under-construction, and ready inventory, provides predictability and reduces reliance on large new launches.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Net ₹3,990 Cr Cost 8.7%
    our net debt at the end of the fiscal year stood at INR39.9 billion, which is 0.2x net debt to equity, well below our ceiling of 0.5x.
  • M&A Land bank for annuity business Acquisition · Closed

    Expand annuity business (warehousing/industrial space)

    33 acres in NCR and 45 acres in Chennai acquired to expand annuity business.

    We've also acquired 33 acres of land in NCR and 45 acres in Chennai to expand this business.
  • Liquidity Liquidity disclosed Strong collections and operating cash flow contributed to net debt reduction.
    our net debt further reduced during the quarter on the back of our strong collections and strong operating cash flow.

Guidance & targets

Presales

  • Presales Value Presales · FY26 · High confidence INR 21,000 crores

    From INR 176 billion today

    In line with this vision, we expect to deliver INR21,000 crores of presales for this year of fiscal '26.

    — Abhishek Lodha

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence ~33%
    We also expect to have underlying EBITDA margins of about 33% for these presales, thus delivering EBITDA of over INR6,500 crores for the full year.

    — Abhishek Lodha

  • EBITDA Profitability · FY26 · High confidence >INR 6,500 crores

    — Abhishek Lodha

Cash Flow

  • Operating Cash Flow Cash Flow · FY26 · High confidence >INR 7,500 crores
    In terms of operating cash flow, we expect to generate over INR7,500 crores of operating cash flow.

    — Abhishek Lodha

Debt

  • Net Debt to Equity Debt · FY26 · High confidence Well below 0.5x
    And in terms of net debt, we expect to be well below our ceiling of 0.5x debt equity.

    — Abhishek Lodha

Business Development

  • New GDV Addition Business Development · FY26 · High confidence INR 25,000 crores

    From INR 237 billion today

    In terms of business development, we are guiding to INR25,000 crores of new GDV addition.

    — Abhishek Lodha

Sales Metrics

  • Walk-ins Sales Metrics · FY26 · Medium confidence 93,000

    From 88,000 today

    For '25-'26, we hope to take the walk-ins from 88,000 to about 93,000, so it's about almost 6% increase in the walk-ins

    — Prashant Bindal

  • Conversion Rate Sales Metrics · FY26 · Medium confidence 8.5%

    From 8% today

    and the conversion from 8% to 8.5%.

    — Prashant Bindal

Annuity Business

  • Annuity Income Run Rate Annuity Business · End of FY26 · High confidence Close to INR 4 billion

    From INR 2.5 billion today

    we expect that number to further grow to close to INR4 billion run rate by the end of fiscal '26.

    — Abhishek Lodha

  • Annuity Income Annuity Business · FY31 · Medium confidence INR 15 billion
    our overall broader strategy of achieving INR15 billion of annuity income by FY '31.

    — Abhishek Lodha

Township Development

  • Palava & Upper Thane Sales Township Development · End of decade · Medium confidence INR 8,000 crores
    we expect these 2 locations to deliver INR8,000 crores of sales by the end of the decade with EBITDA margins approaching 50%.

    — Abhishek Lodha

  • Palava & Upper Thane EBITDA Margins Township Development · End of decade · Medium confidence Approaching 50%

    — Abhishek Lodha

Pricing

  • Price Growth Pricing · Medium term · Medium confidence ~2% below wage growth

    Previously 4% → ~2% below wage growth

    our medium-term strategy of price growth at about 2% below wage growth, we believe this is quite reasonable

    — Abhishek Lodha

Geographic Expansion

  • New City Pilot Geographic Expansion · FY26 · High confidence 1 new city
    we expect in the course of fiscal '26 to start the pilot in one more city

    — Abhishek Lodha

Palava Residential Sales

  • Sales Growth Palava Residential Sales · Current year (FY26) · High confidence 20% or more
    we expect that for the current year, we expect that Palava residential sales will grow quite well. And while we don't break it up into the 2 different buckets, but of Palava residential versus others, we do think that, that will grow quite well, 20% or more.

    — Abhishek Lodha

  • Sales Growth Palava Residential Sales · FY27 · Medium confidence Even more solid growth
    And for fiscal '27, we expect even more solid growth because by that time, we'll get the first full year benefit of the Mulund-Airoli-Palava freeway.

    — Abhishek Lodha

What to watch in Q1 FY26

FY26 Presales Growth

Next quarter (Q1 FY26 results)
Current FY25: INR 176 billion (21% growth)
Target FY26: INR 21,000 crores (20% growth)

Why it matters

Key indicator of the company's ability to maintain its growth trajectory and achieve annual targets.

In line with this vision, we expect to deliver INR21,000 crores of presales for this year of fiscal '26.

Risks & concerns

  • Geopolitical surprises

    medium

    The world today continues to remain difficult, and uncertain plays with geopolitics could impact the profitable growth trajectory.

    Management acknowledged

  • Economic slowdown impacting price growth

    low

    Slower economic growth in FY25 led to a conservative price growth strategy, though conditions are now improving.

    Management acknowledged, mitigated by conservative pricing

Q&A highlights

6 direct
EBITDA margins across Mumbai regions Direct
So, see, our margins generally that we work across segments, be it the mid-income, premium or luxury and, to that extent, kind of across Mumbai, generally tend to be hovering around 30% handle.

Clarifies consistent margin profile across diverse segments and geographies within Mumbai.

Asked by Ajay Nandanwar

Presales mix from new launches, under-construction, and completed projects Direct
New launches contributed to our sales to the extent of 25% to 30%, the rest was more sustained sales across the portfolio. In terms of ready and under construction, I think the ready RTMI inventory sales contributed around 20%.

Highlights the company's diversified sales model, reducing reliance on new launches and contributing to predictability.

Asked by Ajay Nandanwar

Collections catching up with presales growth Direct
So generally, our collection typically lags by a year in terms of presales that we achieve. So, you will typically see this correlation working, where the current year collection was around INR144 billion. And as you know that our last year sales was around INR145 billion. So effectively, with a lag of 1 year, generally it will fall in place.

Explains the typical lag between presales and collections, reassuring investors about cash flow quality and predictability.

Asked by Ajay Nandanwar

Reasons for lower FY25 price growth and outlook for FY26 Direct
I think the reality of last year was that there was slower economic growth in the country than what we expected at the start of the year. And therefore, we decided to be conservative when it comes to our price growth strategy... our medium-term strategy of price growth at about 2% below wage growth, we believe this is quite reasonable

Provides context for past pricing decisions and outlines the company's forward-looking pricing strategy tied to macroeconomic factors.

Asked by Kunal

Palava sales composition (premium vs. mid-income) and strategy to increase premium segment Direct
for the full year, about 20% of our sales came in from the upper mid-income and higher segments. So, the price points for these are units which are trading at over INR1.5 crores... we expect that by the end of the decade, about 50% of presales will be coming from this upper mid-income and premium segments.

Details the shift towards higher-value segments in key townships and the long-term vision for Palava's premiumization.

Asked by Puneet

Sustainability of 20% presales growth given a high base Direct
I think that it's really a question of the business model and how do you build it up. Is this really a spurt? Or is it a setup of increasing the strength of the organization, increasing the depth of the distribution, increasing the width of the number of locations and number of projects? And therefore, where are the sales coming from? ... So, we believe strongly in the predictability of our growth and, therefore, have given the guidance we have.

Reassures that the growth is structural, driven by a robust business model and diversification, rather than a one-off spurt or high base effect.

Asked by Akash Gupta

2 min read 6 chapters

Detailed narrative

Q4 & FY25 Performance Highlights

Macrotech Developers reported its highest-ever quarterly presales of INR 48.1 billion in Q4 FY25. For the full fiscal year 2025, presales reached INR 176 billion, marking a 21% year-on-year growth and surpassing the company's guidance of 20%. The company achieved an embedded EBITDA margin of 33% for FY25, exceeding its 30% guidance. Collections for FY25 stood at INR 144.9 billion, a 29% increase from the previous year, while net debt reduced to INR 39.9 billion, maintaining a healthy net debt to equity ratio of 0.2x.

Macroeconomic Outlook & Pricing Strategy

Management noted that while FY25 saw slower economic growth, the outlook for India remains positive, with expected GDP growth of 6.5% and supportive monetary policy from the RBI, including a 50 basis points interest rate cut. Despite a conservative price growth of 4% in FY25 (lower than the 5-6% guidance) to protect profitability, the company anticipates a medium-term price growth of approximately 2% below wage growth, supported by renewed government capex and spending.

Palava & Upper Thane Development

The company highlighted significant infrastructure investments in its large townships, Palava and Upper Thane. The Mulund-Airoli-Palava freeway is expected to be operational in the current fiscal year, reducing travel time to Mumbai significantly. The Navi Mumbai International Airport is also slated for operationalization this year. These developments are expected to transform Palava into a core suburb, driving sales to INR 8,000 crores by the end of the decade with EBITDA margins approaching 50%.

Annuity Business Expansion

Lodha is actively growing its annuity business, primarily in warehousing and industrial spaces, with over 2.1 million square feet of leased area. The company acquired 33 acres in NCR and 45 acres in Chennai to further expand this segment. The annuity income run rate reached INR 2.5 billion in FY25 and is projected to grow to close to INR 4 billion by the end of FY26, with a long-term target of INR 15 billion by FY31.

Sales Strategy & Market Diversification

The company's sales strategy focuses on a diversified model, with only 30% of FY25 sales coming from new launches, and the rest from under-construction (50%) and ready inventory (20%). The conversion rate improved to 8% in FY25 from 7.5% in FY24, with an average value per conversion increasing to INR 2.3 crores. Lodha maintains a balanced portfolio across affordable, aspirational, premium, and luxury segments, and is expanding its channel partner network in Pune and Bangalore.

FY26 Guidance & Growth Drivers

For FY26, Macrotech Developers targets INR 21,000 crores in presales, representing a 20% growth, with an expected EBITDA margin of 33% and over INR 6,500 crores in EBITDA. The company also aims for over INR 7,500 crores in operating cash flow and plans to add INR 25,000 crores in new Gross Development Value (GDV). Growth is expected to be driven by Mumbai (INR 1,000-1,500 crores incremental sales), and equally by Pune and Bangalore, with a new city pilot planned for FY26.

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