Shares of Macrotech Developers Limited, the largest real estate developer in India, opened their trading hour at Rs 901.95 and currently trade at Rs 902.50. The scrip is up around 1 percent as compared to the previous closing price of Rs 893.75. In the last one-month period, the stock has provided returns of around 13 percent to its stakeholders.
The company recently announced its results for the financial year 2022-2023 and the same has been discussed later on in the piece.
Macrotech Developers Limited is engaged in the business of real estate property development within the country and the United Kingdom. It has a portfolio of premium and luxury housing projects, industrial & logistics parks, and housing projects. The company derives a majority of its revenue from operations within the country.
Some of its premium housing projects include Lodha World Towers and Lodha Venezia (Mumbai). In addition, the company has townships such as Upper Thane which is in the outskirts of the district, and Palava which is based in Navi Mumbai.
A quick walkthrough of the financials leads us to understand that the revenues and net profits, on a quarterly basis, have improved in numbers with revenues going up from Rs 1,774 crores in Q3 to Rs 3,255 crores in Q4 and, net profits, increasing from Rs 405 crores to Rs 746 crores during the same period.
Having a yearly comparison of the above-mentioned metrics, the revenues and net profits have moved in opposing directions with revenues moving up from Rs 9,233 crores in FY21-22 to Rs 9,470 crores in FY22-23 and net profits, on a contrasting note, reduced from Rs 1,209 crores to Rs 489 crores.
The net profit margins reported on a QoQ basis have shown growth from 21.29 percent in Q3 to 22.81 percent in Q4. Moreover, the debt-to-equity ratio of the company, on a positive note, has reduced from 0.86 in Q3 to 0.74 in Q4.
The basic profitability parameters of the company have seen improvement in recent financial years with the return on equity (ROE) moving from 1.16 percent in FY20-21 to 15.3 percent in FY21-22. The return on capital employed (ROCE), during the same timeframe, shifted from 5.21 percent to 10.55 percent.
HDFC Securities gave a ‘Buy’ tag to the company’s stock with a target price of Rs 1,249 indicating an upside of 38 percent as compared to the current price levels.
The rationale behind giving such a recommendation pertains to the robust pre-sales the company has achieved, reduction in debt, and strong Business Development activities.
As per the data available for the quarter ending March 2023, promoters of the company hold a 74.99 percent stake, and Foreign Institutional Investors (FIIs) hold a 18.97 percent stake in the company.
Written by Amit Madnani
