Buying a property is better than renting one: Abhishek Lodha

Macrotech's Abhishek Lodha said that the company believes that people should get onto the home buying ladder as soon as possible

Buying a property is better than renting one, said Abhishek Lodha, Managing Director and Chief Executive Officer of Macrotech Developers which sells its projects under the Lodha brand.

Buying a property is better than renting one, said Abhishek Lodha, Managing Director and Chief Executive Officer of Macrotech Developers which sells its projects under the Lodha brand.(Macrotech Developers)

At a recently concluded investors’ call, Lodha said that the company believes that people should get onto the home buying ladder as soon as possible.

"With the significant increase in rentals across the country, it is seen now that while rentals might look attractive in the short-term, in the medium term, rentals are unlikely to create wealth for the middle class and therefore buying a home as soon as possible is the best possible option, not just from the perspective of creating wealth, but also giving stability and respectability to the family," he said.

Lodha also said that Budget 2024 has reintroduced incentives for first time homebuyers for the lower income sections of the society. The reintroduction of the credit- linked-subsidy scheme is therefore a significant positive, he said during the investors call."

He also said that Macrotech Developers plans to enter a new city and may take a decision by the latter half of FY25.

Macrotech net debt rises 43.5% to ₹4,320 crore in Q1 on higher capex for land, construction
 

Real estate firm Macrotech Developers Ltd net debt rose 43.5% to touch ₹4,320 crore during the first quarter of this fiscal year due to higher investment in land acquisition and construction. 

According to its latest investors presentation, the Mumbai-based company's net debt stood at ₹4,320 crore as of June 30, 2024, against ₹3,010 crore at the end of the March quarter of 2023-24.

According to a transcript of discussions with analysts, Abhishek Lodha said, "In spite of the significant level of business development plus a significant ramp up in construction spend in this quarter, our net debt stood at ₹4,300 crores, which is 0.24 times of equity". 

"This is really an exemplification of the fact that our business delivers strong underlying cash flows, and as we continue to ramp up our investment in construction, we will see in the second half of the year significant acceleration in the free cash flow generation and operating cash flow generation for the company," he added. 

Lodha said that the average cost of funds came down by around 30 basis points to about 9.1%. On the operational performance front, Macrotech Developers posted a 20% growth in sale bookings to ₹4,030 crore for the first quarter of this fiscal on strong housing demand.

Sale bookings stood at ₹3,350 crore in the year-ago period. The collection from customers rose 12% to ₹2,690 crore in the April-June period of 2024-25 from ₹2,400 crore in the corresponding period of the previous year.

Recently, Macrotech Developers reported a 2.7-fold jump in its consolidated net profit to ₹475.3 crore for the June 2024 quarter on higher income. Its net profit stood at ₹178.4 crore in the year-ago period.

Its total income grew to ₹2,918.3 crore during the April-June period of this fiscal from ₹1,671.8 crore in the corresponding period of the preceding year.

Macrotech Developers has delivered around 100 million square feet of real estate and is developing more than 110 million square feet under its ongoing and planned portfolio.