Motilal Oswal has reaffirmed a BUY call on real estate major Lodha Developers, confident about its robust growth trajectory and strong market positioning. The report highlights the company’s promising presale growth of 22% CAGR through FY25-28E, driven by strategic launches and geographic expansion in Mumbai Metropolitan Region (MMR), Pune, Bengaluru, and foraying into NCR. With disciplined execution, controlled net debt levels, and scaling commercial/industrial assets, Lodha is expected to sustain superior operational performance. The price target is set at Rs1,888 per share, implying an attractive upside of 58% from the current market price of Rs1,192. This detailed analysis sets out entry and target levels for investors, supported by a strong financial outlook and valuation framework.

Presales and Launch Pipeline

Lodha Developers has demonstrated consistent growth in presales since FY21, posting a 31% CAGR, with FY25 presales jumping 22% YoY to Rs176.3 billion, surpassing previous guidance. In 1HFY26, presales of Rs90.2 billion mark an 8% YoY increase despite slower launches early in the year. The company plans to launch 11 new projects totaling 9.6 million square feet (msf) with a GDV of Rs133 billion across MMR, Pune, and Bengaluru, alongside five new-phase launches of 3.7 msf valued at Rs37 billion. Quarterly presales are projected to reach record highs of Rs60 billion in 3Q-4QFY26, sustaining an average quarterly presale of Rs50 billion from FY26 onwards. This robust pipeline and execution ensure a 22% CAGR in presales, reaching Rs317 billion by FY28.

Strong Market Presence and Geographic Expansion

Lodha holds the highest market share in MMR at 10%, ranking second in Pune with 5%, and is growing its foothold in Bengaluru from 2% market share toward an ambitious 12% by FY31. Bengaluru now enters a vibrant growth phase for the company, buoyed by acquisitions of projects worth Rs160 billion GDV in 1HFY26, providing a strong launch pipeline for multi-year growth. In the NCR, Lodha is initiating a pilot phase, with advances in land acquisitions and local team setup aimed at formal entry with initial launches from FY27. The strategic expansion includes an emphasis on premium and luxury segments, which supports healthy margins and strengthens the brand’s aspirational image.

Robust Financial Metrics and Operating Performance

Consolidated revenue is expected to reach Rs193 billion by FY28, growing at a 12% CAGR from FY25, driven by increasing sales and launch scale-up. EBITDA is forecast to grow at an 11% CAGR to Rs55 billion by FY28, with margins steady at 29%. PAT is projected to register a 16% CAGR, reaching Rs43 billion by FY28 with a 22% profit margin. Lodha’s disciplined execution supports collections growth, anticipated to rise steeply to Rs294 billion by FY28 as projects mature and delivery phases accelerate. Operating cash flows are solid, enabling comfortable funding for expansion and strict control on leverage, with net debt expected to peak at Rs54 billion (net debt-equity 0.25x in 1HFY26) and subsequently decline, turning net cash positive by FY27.

Commercial and Industrial Portfolio Expansion

Lodha is intensifying its commercial leasing portfolio, expecting an 85% occupancy by FY28, boosted by strong traction in key locations such as Palava, MMR, and Thane. Net lease income for FY28 is projected at Rs6.9 billion, a 23% CAGR over FY25-28. Expansion plans extend to warehousing in NCR and Chennai. The industrial segment revenue is expected to reach Rs12.2 billion by FY28 with a healthy EBITDA margin of 76%, highlighting the monetization of land sales, especially for data center land at Palava. Recent lucrative deals with global hyperscalers at premium rates reinforce Palava’s emergence as a major data center hub and a source of recurring revenue.

Valuation and Target Price

Motilal Oswal values Lodha Developers using a sum-of-the-parts methodology, separately assessing residential, commercial, and industrial segments. The residential portfolio is based on discounted cash flows (DCF) with a WACC of 11.1%, while commercial assets are valued at an 8.5% capitalization rate for operational assets and DCF for ongoing projects. Industrial assets are also valued via discounted cash flows. The net asset value (NAV) stands at Rs1,345 billion after deducting net debt, and applying a 40% premium for going concern yields a target NAV of Rs1,888 per share. This implies an upside of 58% from the current market price, supporting the reiterated BUY rating.

Stock Levels and Investment Strategy

For investors considering entry or portfolio allocation, the current trading price near Rs1,192 offers an attractive opportunity with strong upside potential. Key technical and fundamental levels to monitor:

Investors are advised to accumulate on price dips near support, holding with conviction through expected growth phases until target achievement. Risk management should consider broader market conditions and sectoral dynamics.

Bottomline for Investors

Motilal Oswal’s comprehensive research underscores Lodha Developers’ poised growth backed by strong presales, geographic expansion, and disciplined financial management. The company’s foray into new markets such as NCR coupled with burgeoning commercial and industrial assets provides revenue diversification and recursiveness. With a compelling valuation and a Rs1,888 target price, Lodha represents a strategic BUY for investors seeking exposure in India’s robust real estate sector amidst steady urbanization and infrastructure growth. The interplay of strong execution, market share expansion, and balance sheet prudence reveals a stock primed for sustainable multi-year appreciation.