Strong Performance Promises Consistent Growth

Riding high on record Q4 FY24 bookings of Rs 42.36 billion, Macrotech is targeting sales of Rs 175 billion to register 20 percent growth in FY25. Capitalizing on its strong growth, the recent capital raise, and consolidation opportunities, the company is well on its way to continuously record operational growth.

Macrotech According to a report by Motilal Oswal Financial Services,  Macrotech Developers achieved bookings of Rs 42.3b (in line with estimate), up 40 percent  YoY and 24 percent QoQ. Further, the company achieved its guidance, recording pre-sales of Rs 145b for FY24, up 20 percent YoY.      Sales volumes for 4Q increased 32 percent YoY to 3.3msf. In FY24, the company achieved volume of 11msf, up 19 percent  YoY, and raised prices by 5 percent at the portfolio level.    The company had a successful foray in Bengaluru as both its projects received strong response with 63 percent of the total launched inventory getting absorbed, resulting in bookings of Rs 12b (8% of overall sales).

In line with its medium-term target, the company expects to deliver a 20 percent growth in pre-sales to INR175b in FY25. The growth will be largely driven by Rs300b of ready and ongoing inventory and 10msf of launches with a GDV of Rs 121b, which can increase further with project additions in FY25.

Macrotech reported the highest ever quarterly revenue of Rs 40b, up 23 percent  YoY (8 percent above estimate). For FY24, revenue stands at Rs 103b, up 9 percent YoY. EBITDA (excl. other income) increased 36 percent YoY to Rs10.5b, 13% above  estimate, as margin improved 250bp YoY to 26 percent. However, PAT came in at Rs 6.6b, down 11percent YoY, on account of higher depreciation and tax. Full-year PAT stood at Rs16b, up 5 percent YoY.

Macrotech reported collections of Rs 35b, up 20 percent YoY and 36% QoQ and OCF increased 32 percent YoY  and 100 percent QoQ to Rs 21b. In FY24, collections and OCF were flat at Rs 107b and Rs 57b, respectively.     During the quarter, it spent Rs14b on land and JV-related investments. In FY24, the company achieved business development of Rs 203b – higher than its guidance of Rs175b – with an investment of Rs 41b.-      Aided by the recent capital raise of Rs 33b, net debt further got  reduced by Rs 41b (Rs 11b from operations and Rs 30b from capital raise) to Rs 30b, which is <0.2x of equity.

 The company is aiming to achieve bookings of Rs 175b, up 20 percent  YoY. Of this, 5 percent will be driven by pricing, 4-5 percent from volumes, and the remaining from market share gains. The company is conservatively aiming for Rs 40b from Bengaluru and Pune operations in FY25. The company will have a war chest of Rs 70b (Rs 50b post tax OCF and Rs 20b debt) including headroom for debt and it is targeting to spend 50 percent  on new business development.

 The company achieved Rs 22b in sales across two townships and anticipates a 30 percent growth in FY25, given the progress in infrastructure. The company plans to launch its first premium category product in Palava in FY25, targeting a realization of Rs10k psf on saleable area vs. the current price of Rs 6k psf within the township.

Overall, Macrotech has been delivering a steady performance across its key parameters of pre-sales, cash flows, business development, profitability, and return ratios over the last two years.  And as it prepares itself to capitalize on the strong growth and consolidation opportunities, it is expected to continue recording consistent operational performance.