Lodha Developers' return of launch momentum excites investors

Q2FY27 pre-sales rose 10% year-on-year to ₹5,037 crore, with Bengaluru fetching ₹1,860 crore, a key highlight. Collections were flat at ₹3,450 crore. Typically, one-third of quarterly pre-sales come from new launches and two-thirds from sales in existing projects. This time, the contribution from new launches was lower than one-third, but Lodha sees that improving in H2. Lodha is aiming for six operating projects in Bengaluru and eyes pre-sales of ₹3,000 crore from the city in FY27.

Its foray into NCR through two joint development agreement (JDA) projects in Gurugram is seeing an encouraging initial response. The Mumbai Airoli-Palava connector should be operational in Q3, aiding demand traction at the Palava township. Lodha's FY27 pre-sales target is ₹24,000 crore, while it clocked ₹9,670 crore in H1. JM Financial Institutional Securities is pencilling in H2 pre-sales of around ₹14,300 crore.

On a like-to-like basis, so far in FY27, the Lodha portfolio has seen price appreciation of 4%. Going ahead, it anticipates 6% price growth against cost inflation of around 4%, thus aiding margins. Further, Lodha aims to scale up annual annuity income to ₹3,000 crore by FY32 (including ₹2,000 crore from data centres), from ₹300 crore in FY26. Rental income from the data centre build-to-suit projects would begin contributing from FY29, adding a recurring earnings stream for the company.

Geographical diversification and a growing annuity portfolio are positives, but risks linger. Rising interest rates and dearer home loans have moderately affected sales in the ₹1 crore-5 crore segment, but the luxury segment remains stable, the management said. The West Asia war is a modest drag, as NRI Gulf demand accounts for roughly 4-5% of Lodha's sales. However, Nuvama Research cautions that falling volumes in the MMR and affordability concerns in Gurugram pose challenges to Lodha.

So far in CY26, the Lodha stock is down around 1%, versus a 6% fall in the Nifty Realty index. Pre-sales velocity and monetisation of Palava land would decide the stock's future course.