Macrotech Developers Shares: Buy Macrotech Developers, Target Price Rs 1410: JM Financial
Macrotech Developers Ltd., incorporated in 1995, is a small capitalization company (having a market capitalization of Rs 54442.64 Crore) operating in the real estate sector.
Major product/revenue segments of Macrotech Developers Ltd. include real estate development, land development rights, rental income, other operating income and building materials for the year ending March 31, 2022.
For the quarter ended 31-03-2022, the company reported consolidated total revenue of Rs 3516.41 Crore, up 63.65% from last quarter, total revenue of Rs 2148.74 Crore and in up 34.67% from the same quarter last year, a total revenue of Rs 2611.17 Crore. The company reported a net profit after tax of Rs 538.03 Crore last quarter.
Macrotech Developers (MDL) appears to be entering a healthy growth phase thanks to a combination of sales growth, debt reduction and project acquisitions. In 1QFY23, the value of bookings reached INR 28.14 billion (+194% YoY; down 19% QoQ; on track to reach the full year target of INR 115 billion; covered around 75% growth from FY22-FY23 in this quarter). Collections remained healthy at INR 26.16 billion (+53% YoY; down 8% QoQ). As a result, consolidated net debt declined sharply on a quarterly basis to INR 88.56 billion (INR 93.1 billion in 4QFY22) thanks to internal accruals. Going forward, net debt is expected to trend towards INR 60bn by March 23 due to i) higher operating surpluses in the residential sector and ii) repatriation of UK investments (INR 15bn+ ). In addition, MDL has added 3 new JDA projects having a salable area of approximately 5.1 msf with a GDV of INR 62 billion across MMR, Pune and Bengaluru (guides for INR 150 billion acquisition of GDV during exercise 23). In the green digital infrastructure sector, MDL formed a US$1 billion (30msf) warehousing and light industrial platform with global funds and contributed 110 acres of Palava land to it.
The brokerage remains positive on Macrotech as it continues to perform well on ticket prices and micro markets and maintains a BUY rating with a March 23rd TP of 1,410 (implying a 22% upside). MDL also intends to start paying dividends (around 15-20% of PAT) from FY23.
The promoters held 82.2% of the company’s capital as of June 30, 2022, while the FIIs held 14.54% and the DIIs 1.85%.
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