Air pollution concerns: Health of citizens is more important than a week or two of construction disruption, says Lodha Developers MD Abhishek Lodha

Maharashtra govt is concerned about ensuring that air quality for our citizens continues to remain good and is taking all measures, said Abhishek Lodha

The health of citizens is more important than a week or two long disruption to construction activity, Abhishek Lodha, Managing Director of Lodha Developers said responding to a question over rising air pollution and the possibility of construction restrictions in the Mumbai Metropolitan Region (MMR) during the company's earnings call for Q2FY27.

Mumbai real estate: The health of citizens is more important than a week or two long disruption to construction activity, Abhishek Lodha, Managing Director of Lodha Developers said. (File Photo)

“If that happens, it happens,” Lodha said, underlining that public health should take precedence over a week or two of disruption to construction activity.

“The Maharashtra government is very rightly concerned about ensuring that air quality for our citizens continues to remain good and all the necessary measures that are required to be taken in order to ensure good air quality are taken. Studies have obviously indicated that there are different industries. We have different contributions to the air pollution,” Lodha said.

“In case of the construction industry, there are some very stringent guidelines, which have been implemented in the calendar year 2025 and they will continue now in 2026. And we are hopeful that if there is good adherence to those standards, there will be no negative impact on construction activity. Having said that, the health of citizens is much more important than a week or 2 of construction disruption. So, if that happens, it happens,” Lodha said.

On the impact of the ongoing Middle East crisis on housing demand, Lodha said the disruption has largely been restricted to non-resident Indian (NRI) buyers based in the Gulf region, who account for approximately 4–5% of the company's sales.

Interestingly, the impact has been more pronounced in the entry-level segment, particularly homes priced between ₹1 crore and ₹3 crore.

“The only impact we've seen so far in terms of sales is from the NRI sales in the Middle East, which make up about 4% to 5% of our sales. And these tend to be more focused entry level, which are homes between ₹1 crores to ₹3 crores,” he said.

However, Lodha said the company had not witnessed any other meaningful change in footfalls because of the Middle East situation.

"In terms of the strength of the market in a Central Mumbai or what you refer to as a luxury buyer, we continue to see strong demand. We see that the consumer for that segment is constructive," Lodha said.

Branded developers continue to see demand despite oversupply concerns

Addressing concerns about potential oversupply in the residential market, particularly amid the increasing number of redevelopment projects in Mumbai, Lodha said demand was increasingly shifting towards large, organised and branded developers.

He said the market was distinguishing between supply from Grade A and Grade A+ developers and other developers, with established brands witnessing more resilient demand.

“Grade A+ and Grade A are clearly seeing differentiated demand for their product and that demand is more solid and resilient and is able to convert,” he said.

According to Lodha, this growing preference for established developers and better-quality locations would eventually lead to a more balanced and consolidated residential market.

He also cited the company's performance across different price points and its Bangalore business as evidence of continuing demand for strong brands.

Construction costs see selective inflation due to geopolitical tensions

On the impact of geopolitical developments on construction costs, Lodha acknowledged that inflation had started emerging in certain categories of building materials, particularly those involving energy-intensive manufacturing.

Tiles, for instance, have started witnessing some cost inflation due to higher energy costs. However, he said these categories account for a relatively small proportion of the overall construction cost mix, limiting the aggregate impact.

“Overall, we don't see construction cost inflation being something which is going much higher than one would have normally expected,” he said.

Lodha added that the company builds in a 10% construction cost contingency when launching a project, apart from a 3% project revenue contingency, which provides a cushion against unexpected cost escalations.