Brokerages Stay Bullish on Macrotech Developers but Lower Target Price to ₹1,450

Brokerages have revised their target prices for Macrotech Developers, the real estate giant behind the 'Lodha' brand, citing a slowing macroeconomic environment and limited long-term visibility on price appreciation.

As of 3:30 PM IST, the Macrotech Developers share price was at ₹1,127.00 or 2.13% higher than its previous close.

Despite these concerns, Macrotech Developers posted strong financial results for the October-December quarter, with consolidated net profit surging by 66% to ₹944.4 crore and consolidated revenue climbing 39% year-on-year to ₹4,083 crore. The company's pre-sales bookings also reached a record ₹4,510 crore, reflecting a 32% annual growth, while collections soared 66% to ₹4,290 crore, which Lodha credited to its robust execution capabilities.

The company highlighted sustained demand, particularly for high-quality homes, and expressed confidence that branded developers would remain well-positioned even in a potential market slowdown.

Brokerages' View on the Stock

Japan-based brokerage Nomura Holdings maintained a 'buy' rating on the stock but lowered its target price from ₹1,600 to ₹1,450. It cited concerns over increasing supply and macroeconomic headwinds, which could limit long-term price growth. The brokerage remains optimistic about demand in the real estate sector, particularly for Grade-A developers, but believes that price appreciation might not be as robust due to external pressures.

Meanwhile, Nuvama Institutional Equities upheld a bullish stance on the stock, emphasizing the company’s strong focus on cash flows and geographical diversification in the Mumbai Metropolitan Region (MMR) and Pune. The brokerage pointed to faster land monetization at Palava, portfolio expansion, and annuity asset sales as potential growth drivers. However, it slightly reduced its price target from ₹1,749 to ₹1,703.

Market Trends and Growth Strategy

Although sales values rose by 32% year-on-year, the company has seen a moderation in sales volumes as it shifts focus towards the upper mid-income and premium housing segments. This shift aligns with broader industry trends, where homebuyers are increasingly prioritizing quality, brand reliability, and modern amenities over simply purchasing affordable housing.

Additionally, Macrotech Developers has been actively working on diversifying its revenue streams. The company is strategically expanding into new micro-markets while also looking to monetize land assets efficiently to maintain strong cash flows. It has also been strengthening its presence in commercial and mixed-use developments, which can act as a hedge against residential market fluctuations.

Challenges and Future Outlook

One of the key challenges for Macrotech Developers remains the increasing competition from both established and emerging developers. With more players entering the premium housing segment, pricing power might weaken over time. Additionally, external macroeconomic factors, such as interest rate fluctuations, inflation, and global financial instability, could impact housing demand.

Despite these challenges, analysts remain largely positive about the company's future, given its strong execution capabilities, financial prudence, and ability to adapt to changing market dynamics. With continued expansion in high-growth regions like MMR and Pune, Macrotech Developers is well-positioned to capitalize on long-term real estate demand in India.

While brokerage firms remain cautiously optimistic, investors will be closely watching Macrotech Developers' ability to sustain growth momentum and maintain healthy cash flows amid a changing economic landscape.