A Potential Upside of Upto 40% From This Largest Real Estate Developer Says Sharekhan

An analyst from Sharekhan has shared a coverage report on one of the largest real estate developer, Macrotech Developers Ltd. As the analyst believes that the share price of the real estate developer will surge by upto 40% based on the valuation.

Macrotech Developers Ltd, estwhile name was Lodha Developers is the largest real estate developer in India. Its core business is residential real estate developments with a focus on affordable and mid-income housing. Geographically, it derives a majority of revenue from India.

Most of its major projects are around Mumbai in Maharashtra. Some of its notable projects include Lodha Altamount, The World Towers, Lodha Bellissimo, Trump Tower Mumbai, Lodha Park and smart city Palava.

The company was established in 1980 by Mangal Prabhat Lodha, its headquartered in Mumbai and in April 2021 it was listed as Macrotech Developers Limited. It's current market capitalisation is Rs 40,722.23 crore.

According to brokerage report, "Property registrations in Mumbai and Maharashtra remained resilient during January-February 2023 clocking similar monthly average run-rate as seen during Q3FY2023. Early signs of inflation peaked out and we expect the rate hike cycle to take pause in H2CY23. Macrotech is well placed to benefit from supply consolidation as high interest rate regime affects unorganised players. It is likely to exceed its pre-sales guidance for FY2023 with strong launch pipeline for Q4 while it has already surpassed new project addition targets."

In terms of valuation the analyst explains, "The stock is attractively valued at 2.1x P/B on FY2025E earnings as against an average 3.5x 1 year forward P/B multiple since listing. A correction of more than 25% in the stock price in little over past one month provides favourable risk-reward ratio with FY2025E P/B multiple at 2.1x for the investment for the next 12-15 months. Hence, we retain a positive view on the stock and expect a potential upside of 40%."

The stock price of Macrotech Developers Limited closed at Rs 845.30 per share. Since its listing in April 2021, the stock price has jumped up by 67.92%.

Disclaimer:
The stocks have been picked from the brokerage report of Sharekhan, Greynium Information Technologies and the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.