Buy Lodha Developers; target of Rs 1400: Emkay Global Financial

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Resilient pre-sales: Lodha Developers reported 20FY27 pre-sales of Rs50.4bn, marginally above estimates, with a strong launch pipeline of 11.1msf (GDV: Rs191bn) for 2HFY27.
  • Data center monetization: The company expects to sign a definitive agreement for a few hundred MW of BTS data center capacity in FY27, with operations targeted for FY29, and a Rs15bn land sale transaction for data center by 4QFY27.
  • Bengaluru growth: Bengaluru contributed Rs18bn to 2QFY27 pre-sales, supported by a good response to the new township project, with expectations of exceeding Rs30bn by FY27-end.
  • Pricing power: The company expects 6–7% price growth against cost inflation of ~4%, with pricing power concentrated among reputed developers.

Thesis Validation Checklist

  • Pre-sales growth: Monitor pre-sales growth, particularly in Bengaluru, to assess the company's ability to meet its FY27 guidance of Rs240bn.
  • Data center progress: Track the signing of the definitive agreement for BTS data center capacity and the land sale transaction to gauge the company's progress in monetizing its data center opportunities.
  • Launch pipeline: Keep an eye on the company's launch pipeline and its ability to maintain a strong pace of new launches, which is crucial for sustaining pre-sales growth.
  • Pricing trends: Observe pricing trends in the industry, particularly in Bengaluru, to assess the company's pricing power and its ability to maintain margins.