Macrotech Devel.

Macrotech Developers delivered a strong Q4 FY26 with presales of INR58.9 billion, marking a 23% year-on-year growth and the strongest quarter in the company's history. For the full fiscal year 2026, presales reached INR205 billion, up 16% from the previous year. PAT grew 24% to INR34.3 billion, achieving a 20% margin, and has increased more than six-fold over the last five years. Operating cash flow for FY26 was approximately INR71 billion, reflecting healthy collections growth of 5%.

The company is shifting its focus from headline presales numbers to sustainable PAT growth and capital discipline. Management aims for a 20% CAGR in PAT from FY26 to FY31, targeting over INR85 billion. Net debt was significantly reduced by INR8 billion in Q4, ending FY26 at INR53.8 billion, with a net debt to equity ratio of 0.23x. Business development capex is expected to be muted over the next two years, leading to higher free cash flow generation.

Despite global challenges^🌐 like Middle East tensions and US tariffs, India's fundamentals remain strong. The housing market benefits from structural drivers such as healthy corporate and bank balance sheets, sustained demand, and government capex. Wage growth of 9-10% and consolidation towards branded developers continue to support a long expansion in the housing market. The company believes housing is becoming a more preferred asset class due to lower volatility and resilience.

Palava is positioned for significant value creation with ongoing infrastructure projects. The Navi Mumbai International Airport, 40 minutes from Palava, is now operational. The Mulund-Airoli-Palava freeway is expected to open soon, cutting travel time to Mumbai's Eastern suburbs to under 25 minutes. A bullet train station at Palava, targeting 2028-29, will offer a 20-minute commute to BKC. These developments are expected to accelerate price appreciation and boost EBITDA margins to approximately 50% on Palava's land holdings.

The company is building a structural, long-duration annuity business through data centers at Palava. With 400 acres of shovel-ready land, two anchor operators (AWS and STT) are already secured. The last land transaction with STT was at INR210-230 million per acre, an 8x increase in 4 years. Lodha plans to develop 1 gigawatt of powered shell capacity on 100 acres with an incremental cost of INR100-110 billion, largely self-funded. This is projected to generate over INR120 billion from FY27 onwards in land sales value, contributing to a target of INR10 billion annual rental income from existing assets by FY31.

Macrotech Developers entered the NCR market in FY26 by acquiring two land pieces under a JDA route, with a GDV of approximately INR33 billion. The company sees a significant opportunity in NCR, India's second-largest housing market, which historically lacked large trusted developers. Operations are expected to commence in fiscal '27, following a pilot-and-scale model successfully used in Bengaluru, which contributed INR24 billion in presales in FY26 after three years.

The company assessed construction cost increases at 3-5% of overall cost, primarily affecting gas-dependent categories like tiles, paints, and PVC pipes. This translates to a modest 0.35% impact on sales value if persistent for six months. Labor attrition in March and April was 5-10% above seasonal norms, influenced by geopolitical events and state elections, but management does not view this as abnormal or a significant concern due to efforts in worker welfare.