Macrotech Developers Ltd Management Discussions.

World Economic Overview

More than one year into the pandemic, global economic recovery continues to remain uncertain in the near term. While growing vaccine coverage lifts sentiments and global growth prospects, newer virus mutations and the corresponding toll on humanity raise concerns where health & safety of the citizens becomes the primary focus over the economic growth for policy makers. On one hand high frequency indicators point to a strengthening of growth, led by some of developed markets, while, on the other a renewed global surge in Covid cases by more transmissible strains has led to newer restrictions in several countries. This has led to diverging economic recoveries across different countries and geographies depending upon the extent of policy support and effort towards normalization. IMF forecasts that after contracting 3.3% in 2020, the global economy is projected to grow at 6% in 2021, moderating to 4.4% in 2022. The recovery path across countries has been influenced by curve of the pandemic and policy actions coupled with the impact on mobility of people. Second and third waves of infection have brought back the restrictions on mobility in several countries, multiple times. Output losses on account of such variability have been one of the challenges for the policy makers. Coordinated policy measures by central banks across the world as well as cooperation on vaccination and healthcare front has averted deeper slowdown. Thanks to such unprecedented policy response, the COVID-19 recession is likely to leave smaller scars than the 2008 global financial crisis.

Indian Economic Overview

Due to the onslaught of Covid induced restrictions, the Indian economy is expected to have contracted sharply by -7.3% in FY21 as per the estimates released by MOSPI, Govt. of India. To boost the growth, policy response from RBI and the Government has been swift and coordinated. RBI has continued to maintain ample liquidity in the system. The RBI has reduced Repo rates by 115 bps since the beginning of the Covid shock in March 2020 to 4% which is the lowest in decades. This has continued to keep the interest rates in the benign territory. Similarly, the Government on its part has also taken various initiatives for economic recovery in response to the COVID-19 pandemic through financial packages, tax reliefs, relaxation in interest payments, etc. Aggregate demand conditions after opening up in 2020, have remained resilient. In its first monetary policy statement for 2021-22, the RBI retained its projection of real GDP growth for the year at 10.5%. Some of the green shoots were already visible in the economy in March such as the record GST collections, petrol consumption, electricity generation etc. As per the household survey of the Centre for Monitoring Indian Economy (CMIE), employment conditions brightened in March, with the unemployment rate sliding to 6.5%. With the second wave of COVID-19 infections forcing authorities to bring back restrictions, economic activity in general and activity in contact intensive sectors particularly is set to suffer again. This puts the nascent recovery under some risk. Continued vaccination momentum remains critical for the eventual opening up of the economy and thus the growth. It is heartening to know that the vaccination in India is progressing well with more than 325 million vaccine doses already administered by end of June 2021. Fulfilment of Indias aim to vaccinate the entire eligible population by December will likely yield growth dividend in the second half of the fiscal.

Indian Real Estate Industry Overview

The Indian real estate sector, which includes the residential, office, retail, industrial, logistics and hospitality segments, is a key contributor to GDP growth, and is one of the largest employers in India- second only to agriculture. The sector contributes nearly 6% to the total GDP of the country. According to Anarock Research and various industry sources, with a CAGR of around 10% Real Estate market has grown from US$ 50 bn in 2008 to US$ 120 bn in 2017. The sector is expected to reach a market size of US$ 1 trillion by 2030 clocking a CAGR of 18% and becoming third largest globally.

In the past three to four years, Indian Real Estate has witnessed various change agents including demonetization, implementation of RERA, GST, liquidity crisis, etc, which have cleaned up the sector, brought transparency and have started the process for consolidation of the sector towards the branded developers.

Another key contributor towards the consolidation theme for sector and the cause for its acceleration has been the sharp decline in credit from the formal financial sector to unbranded developers. This coupled with lack of customer trust for this segment has meant that such unbranded players will be unable to bring any meaningful supply in the near future. As per Anarock Research, incremental credit to real estate developers has come down from over an average of 40,000 crore over FY17-19 to merely 5,000 crore in FY20. As per estimate, this figure would have further dropped in FY21. Clearly the dramatic fall in incremental credit flowing from banks & NBFCs to the developers meant that most of the unbranded developers are unable to continue the existing projects as well as launching new projects. These unbranded developers along with the financial institutions who supported them earlier are now looking at the branded and stronger tier-1 developers to rescue those projects by taking over the existing projects and/or tie-up for their new land parcels. Thus, the sector is currently very favourable for the well-known branded developers.

Residential Market Overview

FY21 for residential market could be termed as the tale of two halves. It was the most volatile year on record as a residential industry already struggling for survival was forced to deal with a collapse in residential demand caused by the pandemic induced lockdowns in Q1FY21. In 1HFY21, it seemed unlikely that the subsequent economic fallout would allow market demand to revive in any meaningful way. However, once the initial panic subsided in 2HFY21, due to improved understanding of the fight against the pandemic, economic activity resumed, and market forces rationalized over the latter half of the year. The broad-based income disruption caused by the pandemic weighed heavy on market sentiment initially. Homeownership has traditionally been a coveted aspiration of the average Indian and the acute loss of income security felt by the masses during the worst of the pandemic only reinforced this sentiment. Contrary to the initial belief that Covid would likely hurt the residential demand, it made people realize the importance of owning a quality home. Thus, as the economy opened up, people who had under-bought for last several years rushed to transact. This was further boosted by the lowest home loan rates (sub 6.8%), in several decades and stamp duty cuts introduced by the Maharashtra government. This trend was clearly evident in the registration data as well as the volumes reported by the larger developers. Quarterly sales volumes have steadily improved since Q1FY21 and have surpassed the 2019 pre-COVID quarterly sales average in Q4FY21. Considering that this is the second consecutive quarter to show strong volumes, it indicates that the market is recovering well. As per Knight Frank Research, 71,963 units were sold during Q4FY21, 44% more than in Q4FY20. This healthy growth in sales also encouraged developers to launch new projects which are reflected in the 76,006 units launched during the quarter, a substantial growth of 38% YoY.

MMR & Pune Residential Market

MMR due to its high population density has been one of the worst affected cities by the COVID-19 pandemic. Consequently, the lockdown imposed on March 2020 extended to over 9 months in the form of partial lockdowns. Several parts of MMR had to go into a second lockdown after partial reopening in the month of June 2020. Despite the initial set back, the city bounced back in the second half of the year and showed strong growth.

MMR remained the most active real estate market of India which as per Anarock Research accounted for nearly 24% and 32% of the supply and absorption, respectively, during CY2020. The city reported a launch of approximately 30,000 units and sales of over 44,000 units during CY2020. This continuing trend of sales exceeding launches during the last 4 years (since 2017) has led to a significant reduction the unsold inventory by 12%. Q1CY2021 further saw strong growth in absorption both on a QoQ basis as well as YoY basis. As per Anarock Research, absorption increased by 46% Y-o-Y to 20,350 units during Q1CY21 surpassing the pre-COVID levels. New launches also witnessed an increase albeit at a slower pace of 41% Y-o-Y during Q1CY21. Nearly 14,820 units were launched during the current quarter, gradually increasing post-pandemic but still lagging the absorption levels. Available unsold inventory continued its downward trend and decreased by 3% during Q1CY2021 as compared to Q4CY2020 and was recorded at 197,040 units. Based on the annualized Q1CY21 absorption, unsold inventory in MMR is now just over 2 years, now pointing to a situation where supply is getting constrained. As per Anarock Research, the revival of market trends in the Q3CY20-Q1CY21 is an early sign of market recovery. As per industry sources, buyers are interested in buying houses only from established and branded developers even at a premium. The real estate sector of MMR is well structured and corporatized as compared to other cities due to the early implementation of RERA in Maharashtra. This may lead to a further acceleration of revival of the sector in the city.

The Pune market witnessed a balanced year in terms of supply and demand. As per Anarock Research, nearly 24,000 units were launched and approximately 23,500 units were sold during CY20. During 1Q CY21, it further sold 10,550 units showing 47% YoY growth, further cementing recovery. As of Q1CY2021, the city has 96,440 units available for sale which is nearly 15% of the total available inventory across top 7 Indian cities.


We believe that long term structural potential for the sector to grow is immense. Indian real estate industry has strong structural growth drivers which will keep the longer-term demand trends robust even as the industry undergoes the sectoral cyclicality. These are as under:

• Rapid urbanization boosting urban population

• Nuclearization of families

• Improving education levels

• Rising household incomes

Over the past 5 to 6 years as the sector went through a churn from a high demand growth period to an oversupply period, it impacted pricing and subsequently the demand itself. This in turn meant that consumers continued in the ‘under-bought category for a long period over the past 5 to 6 years. Given this backdrop Covid made ‘under-bought consumers realize the value and security of a quality home. We believe that, cyclically the residential real estate sector now looks poised for a significant up-turn. With long-term indicators pointing to the same:

• All-time best affordability

• Lowest ever home loan rates at sub 6.8%

• Narrowest ever gap between rental yield and home loan rate making home ownership substantially attractive

• Clean up in supply: Surging sales volume during the year, muted launches coupled with accelerated exit of weaker unbranded players means that supply overhang has substantially come down for the sector.

These cyclical factors have the potential to kickstart a virtuous demand-price cycle. As the prices start moving up modestly in-line with inflation, demand will further get a boost as consumers will -want to benefit from low home loan rate scenario.

We believe that we would be able to benefit immensely by capturing this demand on the back of our superior brand recall, diversified portfolio across price points & micro-markets as well as stage of construction, and our stronger financial capabilities after the IPO. These factors make us the preferred partner of choice for customers, channel partners as well as land owners who want to monetize their land quickly through a Joint Development model.

Threats & Challenges

While we are well prepared to capture the opportunities, few challenges in the near to medium term may have an impact on performance:

• Covid related lockdowns & disruptions

• Covid related impact on the wellbeing of employees

• Availability of trained labor especially given the trend of Covid-induced reverse migration

• Rising global commodity prices

• Unanticipated regulatory changes

• General health of financial sector and its ability to keep ample availability of mortgages


The Lodha group has been involved in the real estate business since 1980s and is among of the largest real estate developers in India. Our core business is residential real estate developments with a focus on affordable and mid-income housing. We also have a fledgling industrial & logistics park business where in a short span of time, we have made our mark with joint ventures with marquee investors. We also develop commercial real estate, as part of mixed-use developments in and around our core residential projects to bring vibrancy to our residential developments. Over time we have built unique strengths which will enable us to continue our growth trajectory. Some of these are as follows:

1. Among Indias largest residential real estate developers with a leadership position in the MMR, Indias most attractive market

2. Well-established brand with ability to sell at premium pricing throughout the construction phase

3. Proven end-to-end execution capabilities with continuous innovation and ability to deliver projects at a competitive cost

4. Strong focus on sustainable development

5. Highly diversified portfolio across price points and micro- markets in the MMR with a focus on affordable and mid- income housing

6. Unique ability to develop townships and generate recurring cash flows

7. Innovative marketing and sales strategies

8. High quality management team


We have adopted following elements in our near to medium term business strategy in order to drive and maximize shareholder value.

1. Focus on enhancing leadership position in residential developments by growing in the micro markets of MMR & Pune where we currently have a limited presence

2. Gradually diversifying in select tier-I Indian cities in the medium to long term

3. Leverage our leadership position to act as a partner of choice for landowners and grow using a joint development or joint venture approach

4. Pursue a value-accretive land acquisition strategy

5. Develop large-scale industrial parks, to begin with at Palava

6. Continue accelerated deleveraging of the balance sheet

Business Performance Overview

Despite being impacted severely by Covid during the year, Lodha Group managed to achieve 5,968 crore of pre-sales across all segments. This was primarily driven by the companys performance in the 2H FY21 the first half being deeply impacted by the Covid induced lockdowns in the MMR. This included one of our best ever quarterly pre-sales performance in (Q4 FY21) where we sold real estate worth 2,513 crore. FY21 was also a year where we got a great impetus to our industrial & logistics parks vertical and signed multiple deals. Pre-sales: Our performance in key micro-markets and verticals is as follows:

1. South & Central MMR: In the South & Central segment, company was able to achieve 2,255 crore of pre-sales. The rebound in this segment has been sharpest after lockdowns being lifted. This was largely driven by availability of ready & mature inventory and lack of significant credible supply in the segment from competition.

2. Thane: In Thane company achieved 1,700 crore of pre sales. This was primarily driven by strong rebound seen at all our Thane projects. There also a great traction witnessed in our newly launched ‘Crown- Lodha Quality Homes brand. We launched Crown Thane in the 2H FY20 as a new brand of affordable homes, addressing the needs of working families in the MMR. The strength of the brand and product proposition has continued even during the Covid impacted FY21 and has gained further momentum. The success of this product & brand showcases our ability to be ahead of competition in terms of launching new innovative products. We were able to execute the design of such a product due to our ability to have a very competitive cost structure across the entire value chain of the development.

3. Extended Eastern suburbs of MMR: In the Extended Eastern suburb of MMR, the company delivered a pre-sales of 1,044 crore. The business was deeply impacted by disruptions due to Covid as fewer people could transact in 1H FY21. The segment witnessed a late rebound in the year and clocked 349 crore of Pre-sales in 4Q FY21. Both our townships at Palava & Upper Thane in this suburb witnessed new launches in 2H FY21 showcasing the rebound in growth. Additionally, at Upper Thane, we have started developing plotted developments (plots and villas) as a separate project named ‘Lodha Villa Royale. In light of the COVID-19 pandemic, demand for such a villa and open area development has been quite encouraging. This product near Upper Thane is part of our continuing efforts on product innovation which has significant potential to tap a separate set of audience, thereby creating new market for our products. Once again, we were among the first to identify the Covid induced demand for independent house with open areas. We were able to launch such a project due to our ability to acquire and aggregate land at low cost from numerous individual land owners.

4. Other micro-markets: From other micro-markets, the company achieved pre-sales of 365 crore mainly from Pune & Western Suburbs of MMR. Company has plans to further bring supply in these micro-markets through the JDA (Joint Development Agreement) route.

5. Industrial & Logistics Park business: After the opening up of the city in 2HFY21, the company managed to monetize nearly 165 acres of land for 454 crore in the Palava Logistics & Industrial Park either through JVs with reputed investors such as Morgan Stanley or through outright sales to some of the marquee global players e.g., FM Logistics- a French 3PL firm. Thus far the Company has already monetized more than 255 acres of our industrial park segment through JV or outright sale.

6. Others: During FY21 the company achieved pre-sales of 150 crore from land sale other than industrial parks including acquisition by the Government for various infrastructure projects. Some of the key ongoing infrastructure projects where our land has been identified for the purpose of acquisition are MIDC Panvel expansion, State Reserve Police Force development, Taloja bypass road widening between Taloja and Khoni in the Dombivali- Navi Mumbai region and Multimodal corridor from Virar and Alibaug.

Completions: During the year, construction activity was severely curtailed especially in the backdrop of Covid-induced reverse migration of labor. For the period FY21, Lodha Group completed 2.7 million square feet. The deliveries were mainly in the Upper Thane project which received the Occupation Certificate for first set of buildings. This location will now benefit from occupancy starting in the second half of this year and along with some very significant infrastructure road connectivity, which is coming through to this location.

Collections: Lack of construction activity coupled with covid related lock-down also impacted our collections for the year which stood at 5,052 crore.

Business Development: We have a significant presence in three of the seven micro-markets in the MMR.Other markets (of MMR and Pune), where our presence is not significant, present low hanging growth opportunities as our brand is well recognized there. We will use the capital light Joint Development Agreement (JDA) route to grow into these micro markets. As an outcome of the same, post listing, we have signed four JDAs in the Western Suburbs, Eastern Suburbs and Pune. We have developed a strong deal pipeline giving us a visibility of consummating several such JDAs/JVS with land owners from here onwards.

Customer Experience: We highly value our relationship with our customers as we not only create a relationship but also keep a dedicated focus on growing it with every single connect. Our Customer Experience commitment is to take ownership throughout the customers journey with us, and this is done using a proactive approach towards pre-empting our customers needs and providing best in class involvement which further enhances our customer association. Our customers belief in our relationship has seen a consistent increase in our customer satisfaction scores each financial year. During the financial year 2021, we conducted 5,227 surveys where we achieved a score of 4.5 out of 5.0, a true reflection of our customers satisfaction with their experience. We have successfully handed over 4,000 homes in the last financial year and have seen repeat business of over, 700 crore through repurchase and referrals, a testimony of the experience we provide to our customers.

Financial Performance Overview

Our Results of Operations

The following table sets out select financial data from our consolidated statements of profit and loss for financial years ended March 31, 2021 and March 31, 2020, the components of which are also expressed as a percentage of total revenue for such periods:

For the year ended March 31
Particulars 2021 2020
(in Rs. Crore) (% of Total income) (in Rs. Crore) (% of Total Income)
Revenue from Operations 5,449 94.4% 12,443 99.1%
Other Income 323 5.6% 118 0.9%
Total Income 5,772 100.0% 12,561 100.0%
Cost of Projects 3,604 62.4% 9,550 76.0%
Employee Benefits Expense 286 5.0% 391 3.1%
Other Expenses 187 3.2% 595 4.8%
EBITDA 1,372 23.8% 1,907 15.2%
Finance Costs 1,126 19.5% 730 5.8%
Depreciation, Amortisation and Impairment Expense 73 1.3% 292 2.3%
Profit Before Exceptional Item and Tax 496 8.6% 1,003 8.0%
Exceptional Items 463 -
Share of Net Loss in Associate -
Profit Before Tax 33 0.6% 1,003 8.0%
Tax Credit/ (Expense): 15 0.2% (261) -2.1%
Profit for the Year 48 0.8% 742 5.9%

Prior to March 25, 2020, our Company held 75.00% of Lodha Developers UK Limited and such company was accordingly consolidated in our financial statements as a subsidiary. With effect from March 25, 2020, pursuant to the share purchase cum shareholders agreement, which resulted in reduction in our Companys ownership in such company to 51.00% and changes in management rights over relevant activities, Lodha Developers UK Limited and its subsidiaries were consolidated under "Ind AS 111 – Joint Arrangements". Therefore, results of operations for year ended March 31, 2021 and corresponding period of the previous year are not comparable.

The table below compares the performance of India operations:

(Rs. in crore)

Particulars For the year ended March 31
2021 2020^
Revenue from Operations 5,449 9,577
Other Income 323 108
Total Income 5,772 9,685
Cost of Projects 3,604 6,397
Employee Benefits Expense 286 321
Other Expenses 187 511
EBITDA 1,372 2,348
Adjusted EBITDA* 1,711 2,905
Adjusted EBITDA Margin** 31.4% 30.3%
Finance Costs 1,126 686
Depreciation, Amortisation and Impairment Expense 73 291
Profit Before Exceptional Item and Tax 496 1,479
Exceptional Items 463 -
Share of Net Loss in Associate - -
Profit Before Tax 33 1,479
Tax Credit/ (Expense): 15 (258)
Profit for the Year 48 1,221
Adjusted Profit (adjusted for exceptional items) 511 1,221

^Proforma for excluding UK operations which is comparable for FY21;

*Adjusted EBITDA = EBITDA + interest included in cost of projects;

**Adjusted EBITDA Margin = Adjusted EBITDA/ Revenue from operations

Total Income (including other income) stood at 5,772 crore during the financial year under review. EBITDA was 1,372 crore, while the adjusted EBITDA was at 1,711 crore implying an adjusted EBITDA margin of 31.4%. Numbers for FY21 have to be seen in the context of Covid which impacted the construction as well as pre-sales leading to lesser completions and thus lower revenues. Covid-led muted revenue recognition further impacted the profitability ratios on account of lower operating leverage. This is likely to reverse as the economy normalizes post pandemic.

Cash Flows

The table below summarizes our cash flows for the consolidated operations for the year ended March 31, 2021 and 2020.

(Rs. in crore)

Particulars For the year ended March 31
2021 2020
Net cash generated from operating activities 2,524 3,772
Net Cash Flows from Investing Activities 420 212
Net Cash Flows used in Financing Activities (2,835) (4,189)
Net Increase / (Decrease) in Cash and Cash Equivalents 109 (205)


As of March 31, 2021, our consolidated indebtedness is as set out below

(Rs. in crore)

Category of borrowings As at
31-March-21 31-March-20
India Debt
Non-Convertible Debentures 4,916 5,035
Other loans (Secured & Non-Secured) 11,637 11,705
Total (A) 16,553 16,740
Overseas Debt
Senior notes (Secured) 1,640 1,683
Total (B) 1,640 1,683
Total (A+B) 18,193 18,423

As described above, our debt pertaining to India operations stood at 16,553 crore. Overseas debt of 1,640 crore is secured against UK cashflows.

Key Financial Ratios (Consolidated)

Following are the Key Ratios disclosed in accordance with SEBI (Listing Obligations and Disclosure requirements 2018) (Amendment) Regulations 2018

Ratios (Definition) 2021 2020 % Change Reason for change
Trade Receivables Turnover Decrease in Trade Receivable Turnover ratio is mainly on account of lower revenue due to Covid 19 pandemic
(Revenue from Operations/ Average Trade Receivables) 7.52 19.46 (61%)
Inventory Turnover 0.13 0.27 (54%) Decrease in Inventory Turnover ratio is mainly due to lower cost of projects corresponding to lower revenue.
(Cost of projects/ Average Inventory)
Interest Coverage Ratio 1.44 2.37 (39%) Decrease in Interest Coverage ratio is on account of lower EBIT corresponding to lower revenue.
(EBIT/ Interest Expenses)
Current Ratio 1.11 1.01 10% Improvement in Current ratio is due to reductions in Current Liabilities.
(Current Assets/ Current Liabilities)
Debt Equity Ratio 3.54 3.63 (2%) Improvement in Debt Equity ratio is due to reductions in Total Debt from operating cash flow.
(Total Debt/ Total Equity)
Operating Profit Margin (%) (EBITDA/ Total revenue) 29.37% 16.13% 82% Improvement in Operating Profit Margin is due to non consolidation of UK Business having lower margin.
Net Profit Margin (%) 0.83% 5.90% (86%) Reduction in Net Profit Margin is on account of exceptional items.
(Profit After tax/ Total Revenue)
Return on Net Worth 0.94% 15.69% (94%) Return on Net Worth is lower due to lower Profit
(Profit After tax/ Average Total Equity) After Tax on account of exceptional items.

Risks And Mitigation

We continue to be exposed to a number of risks such as economic, regulatory, health and environmental risks as well as sectoral investment outlook. Some of the key risks are highlighted below.

Risk from Covid

Risk: New strains of the virus could have an impact on the economy at large. A more severe wave in future could force the authorities to implement strict lock-down measures which may have an impact on the construction activity as well as pre-sales. Associated risks from covid could also impact the labour availability in the short to medium term.

Mitigation: Impact from the 2nd wave of Covid seems to be receding. Increasing vaccination will prevent further waves or at the very least reduce the intensity and thus its impact on economy. India has already administered more than 325 million doses of vaccine by end of June 2021 and aims to completely vaccinate its entire population by December 2021.

Economic slowdown

Risk: Real estate business is cyclical in nature and remains correlated with the larger economy of the country. Any slowdown in the economy either as fall out of the health risk emanating from covid or otherwise will have an impact on our business as well.

Mitigation: As highlighted by the RBI as well as other reputed global organizations, we remain optimistic of the macro stability of the Indian economy. Additionally, longer term structural drivers for housing in India which are driven by: increasing urbanization, rising education levels, growing per capita income etc, remain robust. Lower home ownership as compared with other developed markets as well as large emerging markets implies that structural drivers would remain dominant for medium to long term. All-time best affordability coupled with lowest ever home loan interest rates means that impact of any economic slowdown in the near term will be overcome in a relatively short span of time.

Regulatory risk

Risk: Any adverse change in regulatory framework can have a negative impact on the sector. Any bottleneck in getting approvals, substantial increase in various premiums and levies could impact profitability of the companies operating in the sector.

Mitigation: Having realized the importance of the sector towards employment generation and its cascading benefits, Government bodies including municipal authorities have been supportive towards the sector over the past few years. We continue to proactively engage an various authorities through industry associations as well as in individual capacity on espousing industry issues.

Concentration Risk

Risk: Our business is presently primarily concentrated in the MMR. Any adverse regional issue either on climate or economy could adversely impact the company.

Mitigation: The Company plans on expanding into all micro-markets of the MMR & Pune in the near term. Over the medium term we plan to expand into other tier-1 cities such as NCR, Bengaluru and Hyderabad. This will bring geographical diversification to our business and mitigate the concentration risk.

Commodity Price Inflation Risk

Risk: Rising commodity prices and its likely derivative impact has the potential to impact the profitability of the sector.

Mitigation: Commodity price inflation is often transient in nature albeit it may persist for some time before coming down again. Impact of commodity prices on the overall cost, in the real estate sector is in any-case somewhat limited given that land & approval cost, are a larger post cost of the structure. Our scale of operation enables us to negotiate the best prices on the inputs. Also, given our strength of brand, we remain confident of passing on this inflation to end consumers.

Re-emergence of Tier-2 Developers

Risk: Supply from Tier-2 developers was one of the reasons for the erosion of profitability in the sector during the latter half of the last decade. Limited supply of credit post NBFC crisis and eroding customer trust on such players has meant that tier-2 developers have lost share and the supply in the industry has become more disciplined. Any reversal of this trend could once again impact the profitability of the sector.

Mitigation: As a branded developer, we will continue to invest in our brand. In order to give a superior customer experience, we will be investing in technology as well as people. We believe the combination of our superior delivery track record, brand and customer experience will make us stand apart vis a vis tier-2 developers and enable us to continue gaining market share in our target markets.


As the sector emerges from the shadows of the pandemic, we expect the branded developers to emerge stronger. We believe that the enablers for housing market remain intact and place us on a pedestal of growth. The consolidation in the sector is expected to continue at an accelerating pace and we expect to improve our market share in the micro-markets where our market share is insignificant currently. We expect to enter into several JDAs as more and more landowners as well as lenders approach us to take over their projects. In the Industrial & logistics park segment, we expect to continue our journey of adding onto more partners and monetize more land.

Internal Controls

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of operations. These systems provide a reasonable assurance in respect of financial and operational information, complying with applicable statutes, safeguarding of assets of the Company, prevention & detection of frauds, accuracy & completeness of accounting records and ensuring compliance with corporate policies. The framework includes internal controls over financial reporting, which ensures the integrity of financial statements of the company and reduces the possibility of frauds. Design of key processes is reviewed periodically, from the point of view of adequacy of controls. Internal controls are tested for effectiveness, across all project sites and functions by the Internal Audit team, which is reviewed by the management for corrective action from time to time and deviations, if any, are reported to the Audit Committee periodically.

Human Resources

We consider our people as our most valued assets and pay utmost attention to their development and well-being. We have 2,647 associates on our payroll. It is our endeavour to provide a safe and conducive workplace to all our associates, our workplace is also highly performance driven and free from any discrimination. We provide equal employment opportunities regardless of age, color, disability, marital status, nationality, race, religion, caste, place of birth, descent, sexual orientation, and gender identity. We strive to maintain a good work environment that is free from any personal and sexual harassment.

Our policies are robust and provide a standard framework and structure to our way of working. They provide clear guidelines to associates on how the Company operates and instil the importance of integrity and ethical behaviour. The Companys policies are compliant with extant laws and regulations and provide clarity about expectations laid down from the associates and other stakeholders.

Culture Tenets at Lodha

We are an organization that is extremely fast and dynamic but at the same time, holds a firm foundation and strong value system which is performance driven and welcomes innovation. Our associates are free to act and exhibit a strong sense of ownership.

The nine culture tenets are our accepted norms and guiding beliefs shared by everyone in the organization as the right way to think, feel and behave.

EXCEPTIONAL - We are an exceptional company and we will achieve exceptional outcomes

FORTHRIGHT - We believe in forthright and direct communication with all our stakeholders

CUSTOMER CENTRIC - We are unwavering in our commitment to being world class in all touch-points

ECONOMIC VALUE CREATORS - We care about profits

LEARNING FOCUSED - We learn from our mistakes and strive not to repeat them in the future

NIMBLE - We are nimble in our planning and execution

EMPOWERED - We empower our associates to make a difference

MERITOCRATIC - We invest in our people and reward for value creation

COLLABORATIVE - We expect collaboration & high performance from all our associates

People Development

Hiring and assimilation of new talent is the key responsibility of a Talent Assessment Champion (TAC). Under the TAC initiative, the best people managers and leaders at Lodha are entrusted with the responsibility to hire the best talent for future. A TAC is expected to raise the bar of talent we get on-board and also act as a mentor for them. They focus on getting people with the right skill set and also lay a larger focus on right attitude and best culture fitment for the organization. With enhanced focus on internal mobility, we target to build most of our leadership pipeline from within the organization.

We publish more than 75% of our open positions on our internal talent portal PRISM with an objective of closing at least 20% of these positions internally by providing role enhancements and growth opportunities to current associates.

Our Key Associate Group (KAG) program (Introduced in 2016), is designed for the top most talent working with us. In addition to enhanced benefits around housing, health and holidays, a dedicated relationship manager who takes care of their career aspirations, development needs and other factors is assigned to each key associate to ensure that they have a faster progression and experience an overall comfortable environment at work. Our key associates have access to a large array of eLearning programs and micro-learning sessions. This has opened the door to self-paced learning and our associates took 13,000 online courses and 1,000+ participants were a part of offline training interventions

Health & Safety

Providing a safe working environment for our associates, contractors and laborers is of paramount importance for us at Lodha. We have achieved zero fatality with 16 million+ safe man hours of construction work across our project sites. More than 20,000 workmen have benefitted from our various labor welfare initiatives. Our associates have various health benefits including medical insurance, 24x7 free doctor consultations, in-house nutritionist and numerous other initiatives which ensure their physical, mental and emotional well-being. Maternity benefits, crche policy and other exclusive wellness initiatives ensure that our women associates have a conducive work environment and are able to strike a balance between home and work During the COVID crisis, we extended maximum support to our associates who were impacted by the virus. In addition to providing oxygen concentrators, medical assistance, essential PPE, home sanitization services and immunity booster kit, we have also vaccinated 1,000+ employees, family members and third-party contractors free of cost.

Sustainability – Our Approach

During the last few decades we have grown at an unprecedented rate as a nation and as a Company. The coming decade will also see an ever increasing pace of urbanization and rising of household income, which will offer us immense growth opportunities. All this is happening in the backdrop of time running out to fight climate change. We have always cared about the environment because we care about our children, and believe that the future generations deserve to be given a better earth than what we inherited. Over the past few years, the climate change and sustainable development have become ever contextual. We realize that we have a much larger responsibility given that we are the largest real estate company in the market; we know that we will be setting the benchmarks for high quality and sustainable development, across price segments in India. It is important to develop the right perspective towards climate change, and the significant transition and physical risk global warming we are confronted with.

We have partnered with Rocky Mountain Institute, Colorado, USA for developing a roadmap for a zero carbon future and aim to achieve carbon neutrality in our operations by 2035.

Aiming for a zero carbon future is the need of the houres, currently buildings account for 35% of energy consumption in India and this number is growing, and companies like us can lead the change and help to reverse this increase. The opportunity is significant especially when read with the estimates that the urban infrastructure in India will see a doubling of size in this decade.

By defining over-arching North Star goals for sustainability, we will create long-term value and are certain to receive support from various stakeholders in this transformative journey. Our North Star goal of carbon neutrality by 2035 adheres to an internationally recognised commitment framework and we will be entering into a formal commitment with the framework in the FY2021-22. In Indias fight against climate change, we will continue building the worlds finest developments while preserving nature and her resources. The commitment remains to make a difference and we work towards the larger goal shared by all, a goal to leave no carbon footprint.

A. Environmental KPIs Achievements
Efficient Planning & Design Sustainable eco-system development ensuring reduced mobility needs (hence CO2 emissions) and superior quality of life
Efficient building designs, "Breathing architecture", better & healthy air circulation, resulting in reduced energy needs for air conditioning
Across our offices projects glazing used is better than the glazing recommended in the ECBC/ ECBC+ categories
All commercial buildings LEED Gold/ BEE certification undertaken or in the process 40 lakhs kWh per year of energy savings and reduced CO2 emissions of 2,900 tons per year, due to use of energy efficient equipments across our projects like regenerative drive, DOAS, 5 star installations and others initiatives
Ensuring all our offices buildings our pandemic resilient (planned to get IMMUNE rating – 3 star and 4 star)
All our future projects would be EV ready with upfront space provisioning for EV chargers in future. EV adoption has potential to reduce CO2 emissions by 3,000+ tons per year at just Palava project.
Energy Conservation 22 lakh kWh units per year of renewable solar power generated 1,950 tons per year of CO2 emission reduced due to implementation of various sustainability initiatives like smart street lights, renewable power, awareness drives and others 11,700 trees saved per year (CO2 equivalent)
Water Resilience 100% treatment of used potable water across projects 30 million litres per day capacity of STPs installed, helping save 7000 million litres of potable water per year due to use of treated water
1,150 million litres per year of potable water saved due to the implementation of various sustainable initiatives like low flow fixtures, awareness drives, robotic cleaning and treated water for construction
700 million litres per year of ground water saved (i.e. ground water flowing into STP), preventing
500 tons per year of CO2 emissions
Palava has an LPCD of 92 in 2020, lowest across urban India
30 million litres of water per day volume across sites for effective rain water harvesting
Waste Management 15+ Tons of organic waste processing capacity, have been installed across sites ensuring efficient waste management 33
100+ acres of greens developed at Palava City
25,000 trees, planted 1.3 lakh sqft of urban forest in Thane
Green Spaces 20 acres of Nursery which has 3 Lac + plants and 300+ plant species helping promote bio- diversity
Lakhs of trees from our in-house nursery facility is also contributed towards social plantation drives
Environmental friendly Palava is designed as a "pedestrian first" smart city. Upcoming phases of Palava would have dedicated non-motorized transport corridors
Mobility services 68 lakh Kms per year of shared mobility such as buses and carpooling, preventing 780 tons per year of CO2 emissions
35,000+ per year cycle rides, preventing 30 tons per year of CO2 emissions