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Macrotech Developers shares continued to rise on Thursday, extending gains to a third straight session. The Macrotech (Lodha) stock rose by Rs 39.4 or 3.9 percent to Rs 1,051.8 apiece on BSE at the strongest level of the day.
The Street gave a thumbs-up to the company's strong earnings report earlier this week, boosted by strong topline as well as pre-sales.
ICICI Securities said the company saw a record year of sales bookings and its outlook remains strong.
The brokerage is of the view that the company's sales guidance is achievable given that it has added new projects, a majority of which are slated for a launch in the year ending March 2023. It mentioned a demand slowdown in the Mumbai Metro Region market and rising interest rates in India as key risks.
ICICI Securities maintained a 'buy' rating on the stock with a target price of Rs 1,013. Though the brokerage mentioned the emergence of cost pressure for the company, it believes Macrotech's price hikes and inventory mix have mitigated the impact.
Morgan Stanley continued with its 'equal-weight' call on Macrotech but lowered its target price to Rs 1,145.
After the market hours on Tuesday, the realty company reported a net profit of Rs 538 crore for the January-March period, up 72.3 percent on a year-on-year basis. Its revenue increased 36 percent on-year to Rs 3,444.6 crore, according to a regulatory filing.
The company's earnings before interest, taxes, depreciation and ammortisation (EBITDA) increased to Rs 871.3 crore for the three-month period, from Rs 808.9 crore for the corresponding period a year ago.
The company's EBITDA margin, however, declined to 25.29 percent from 31.91 percent in the year-ago period.
"We are extremely pleased to report our best ever quarterly and annual pre-sales performance. It's a true testimony of the strong brand and the consumer trust that it inspires," Macrotech Developers Managing Director and CEO Abhishek Lodha said.
Demand for quality housing remains strong on the ground, he said. "With each passing quarter, demand only strengthens on the back of rising consumer confidence on the strong real estate brands on the back of growing economy and per capita income," he added.
Speaking on price hikes, he said: "We are guiding for an increase of 6-8 percent price rise. This, I think, more across the industry, as well as for our company, but definitely for our company. We think that the price hikes will happen partly at the start of the year, partly in the middle of the year, it's not all going to happen at one go.”
The growth journey of the Indian housing market has just begun, on the back of rising incomes and favourable demography, he added.
He also said the industry has entered a positive price-demand cycle after several years, enabling the conversion of latent demand into actual sales in a shorter timeframe. The company is confident of achieving a CAGR of around 25 percent in pre-sales over the medium term, he said.
Mumbai-based Macrotech Developers is one of the leading real estate developers in the country. It markets properties under the Lodha brand.