Steady growth and value unlocking
Lodha Developers (Lodha) is on track to deliver steady (~20%) pre- sales growth supported by rising geographical diversification (MMR’s share in sales down to ~65%, imminent entry into the NCR) and wide segmental presence (offers unit sizes of INR0.01–1bn plus). Its large land parcel in Palava is set to create significant value through: i) increasing premiumisation; and ii) unfolding data centre (DC) opportunity (Link) aided by state government measures (Link) to solidify Mumbai’s leadership in the Indian DC space.
While softening housing sales volumes in the MMR and Pune are an issue (Link), we believe Lodha’s pedigree can overcome these challenges. Retain ‘BUY’ with an unchanged TP of INR1,580.
Steady pre-sales growth aided by diversification
From being a largely MMR-centric player (with bulk of its bookings coming from South/Central Mumbai, Thane and Extended Eastern suburbs) at the time of its IPO, Lodha has become a well-rounded developer by i) solidifying its leadership position in the MMR through market share gains in new micro-markets; and ii) successful scale-up of operations in Pune and Bengaluru. MMR now contributes ~65% of pre- sales and we envisage this further decreasing to 50% over the long-term, aided by its imminent entry into the NCR. Lodha’s ability to tap the entire spectrum of housing demand (offers ticket sizes of INR0.01–1bn plus) also burnishes its prospects.
Growth enablers in place
Robust business development (FY26E target of INR250bn GDV addition already achieved in H1FY26), quick turnaround from land acquisition to launches (GDV of FY26E launches ~2x of FY25) and lean balance sheet (0.25x net debt/equity) are likely to help Lodha achieve its growth plans.
Palava value unlocking underway
Ongoing infrastructure developments around Palava are bringing it ever closer to Mumbai, enabling ‘premiumisation’ of Palava housing business; Lodha anticipates INR80bn of annual pre-sales from Palava by 2030 with 50% EBITDA margin.
The other big opportunity in Palava is in the form of data centre (DC). The Indian DC market’s capacity of ~1.12 GW (vacancy of ~4.3%) is set to surge to ~2.1GW by end- CY27. Mumbai dominates the DC industry in India with a 54% share in overall capacity and negligible vacancy levels (< 1%); the city shall account for 61% of the new capacity addition in the country by CY27. The Maharashtra government is providing various incentives (Link) to ensure that Mumbai maintains its leadership position in the DC space. Lodha has set aside 400 acres in Palava to benefit from this unfolding opportunity and is set to emerge as a major DC enabler (Link). We believe value unlocking in Palava would gather pace as the digital infra ecosystem gets created going ahead. Lodha Developers Nuvama
