Macrotech Developers plans to enter a new city, may take a decision by latter half of FY25

Macrotech Developers is considering new cities and may take a decision by the latter half of FY25, said Abhishek Lodha, MD and CEO of Macrotech Developers

Macrotech Developers, also known as Lodha Developers, is currently considering names of a couple of new cities that it plans to enter and is expected to take a decision on the next city in the latter half of FY25, said Abhishek Lodha, Managing Director and Chief Executive Officer of Macrotech Developers.

Macrotech Developers is considering names of a couple of cities that it plans to foray into and is expected to take a decision on the new city in the latter half of FY25, said Abhishek Lodha, Managing Director and Chief Executive Officer of Macrotech Developers.(Macrotech Developers)

The company is currently active in Mumbai and Pune. Its project is in the early stages of construction in Bengaluru.

"We are making good progress and we expect in the next one or two quarters, we will conclude our pilot phase in Bengaluru. We have also started studying which new city will be considered by us for the next piloting entry. We are currently considering a couple of cities and expect to make a decision on the next city that we will do our pilot in the latter half of this current fiscal year," Lodha said at a recently concluded investors’ call. He did not name the cities.

Lodha observed that there has been a significant increase in rentals across the country and while they may seem to be attractive in the short-term, they are unlikely to generate wealth in the medium term. Therefore, buying a home is the best possible option, he added.

Mumbai, Pune, Bengaluru drivers of performance and growth

Abhishek Lodha also said that the company is approaching the end of its pilot phase in Bengaluru and that it hopes that “in the course of this fiscal year, we will be able to confirm that our pilot has successfully concluded and we are now at a stage where we feel comfortable in the Bengaluru market to expand our presence there.”

"In line with that, we are also studying any new markets, new cities that we can start a pilot process, because that process for us is a six to 12 months study process and then a three-to-four-year pilot process. We are currently exploring a couple of cities and hope that in the course of this year we will be able to conclude on any of those cities we want to start our pilot in," Lodha said.

He said that over the next three years, the company does not expect the new city to contribute any significant amounts in terms of the overall pre-sales.

Replying to a question during the investors' call, Lodha said, “Pilot phase by definition is an exploratory phase and therefore we do not expect any substantial contribution from the new cities. For the next three years, you should focus on Mumbai, Pune and Bangalore as the drivers of our performance and growth," Lodha added.

Buying a property is better than renting one

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 said 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."

Q1FY25 performance

The company on July 30 reported a profit after tax (PAT) of ₹480 crore, an increase of 186% year-on- year (YoY) for the first quarter (Q1) of FY 25. It also reported pre- sales of ₹4,300 crore in the Q1 FY25, an increase of 20% YoY.

The company's collections rose by 12% YoY to over ₹2,600 crore and its revenue from operations increased by 76% YoY to ₹2,850 crore in the Q1 FY25, it said in a statement issued on July 30.

The company also added three more projects during the quarter in the Mumbai Metropolitan Region (MMR) and Pune with a combined gross development value of ₹11,100 crore.