Macrotech Devel. Management Discussions

Review of Global Economy

The financial year 2023 saw impact of the Covid especially in countries like China, heightened geopolitical tensions led by Russia-Ukraine war, the resultant high inflation and the global fight on inflation spearheaded by all Central Banks. However, in the new financial year, while we have come out of the Covid challenge, most of the other issues continue to linger on, albeit with lower intensity.

Despite the challenges faced by the global economies, Global GDP growth thus far has surprisingly remained in the positive territory though slowing down considerably as compared to the previous year. Unprecedented monetary tightening done by the central banks has had somewhat less than expected impact on the overall economic activity. This has strengthened the view that the developed economies led by US are likely to have a ‘soft landing or a ‘no landing rather than a recession or ‘hard landing. IMFs latest forecast: Growth will slow from 3.4 in CY22 to 2.8 percent in 2023 before accelerating to 3.0 per cent in 2024.

In line with earlier commodity cycles, most commodity prices which had shot up in the early part of the previous financial year have eased off noticeably. Prices for most of the commodities such as metals etc. are expected to be below the average levels seen in 2022.

After rising sharply over 2021 and much of 2022, inflation in most of the world has started slowing down, mostly driven by falling energy and food prices and fading supply chain pressures. This is paving the way for a reduction in the pace and intensity of interest rate hikes by the worlds major central banks, suggested at their recent meetings. However, while the inflation has been moderating in the face of steep policy rate hikes initiated by the Central Banks, the pace of moderation remains unsatisfactory for policy makers and it remains above the comfort level of most inflation targeting economies. This has made policy makers fear that inflation is becoming sticky prompting them to keep the interest rates higher for longer resulting in a downward bias to global growth forecasts. Also, with no end in sight for the Russia Ukraine war, any further worsening in the geopolitical tensions could once again disrupt global trade and supply chain leading to another round of high inflation especially in the energy prices.

As per IMF estimates, annual average inflation for various economies is expected to decline in 2023 vs. 2022. However, it is expected to remain above the pre-pandemic levels as well as the targets of the central banks. For advanced economies, it is projected to decline from 7.3% in 2022 to 4.7% in 2023. In emerging market and developing economies, projected annual inflation declines from 9.8% in 2022 to 8.6% in 2023 and 6.5% in 2024. With softening of inflation, it is expected that the monetary tightening initiated by the Central Banks will at the very least hit a pause during the year.

Review of Indian Economy

The financial year 2023 started on a rather gloomy note with the Russia-Ukraine conflict and the resultant energy price inflation – often Indias Achilles heel. India has weathered the storms of the previous year remarkably well and remained an oasis of calm in troubled global macro conditions. Led by efficient vaccination roll out, India emerged stronger than some of the other larger economies. To fight the inflationary pressures, global central banks led by the US Fed have raised benchmark policy rates substantially. This also forced RBI to raise policy rates by an unprecedented 250 bps in the financial year 2023 – fastest increase in policy rates in last two decades. However, given the fiscal prudence adopted by the Indian Government during the early part of the pandemic period, Indian macro conditions remain conducive of robust growth in spite of the above normal inflation seen recently which remain manageable to a large degree. Despite the challenges, Indian economy managed to grow by 7.2% in FY23 (Source: NSO), showcasing the structural nature of growth.

The Indian economy appears to have moved on after its encounter with the pandemic, staging a full recovery in FY22 ahead of many nations and largely ascending to the pre-pandemic growth path in FY23 and beyond. At the same time three key challenges remain entrenched largely from global macro side which will pose hindrance to Indias growth potential. First, inflation is likely to remain at an elevated level even though it may have already peaked. Secondly, aggressive tightening of monetary policies across the central banks of advanced economies is likely to cause a global slowdown this year, impacting trade and may also result in capital outflows and a rising imbalance in the balance of payment account. Third, higher energy prices is likely to keep the current account deficit at a higher level thus pressuring the currency. Additionally, on the domestic front - uneven spread of the recovery has meant that parts of the economy have still not reached their pre-pandemic levels leading to slower rural recovery.

The governments focus has rightly been on sectors such as infrastructure, construction, and manufacturing that create jobs for workers across all skills. Production-Linked Incentive (PLI) Schemes for various industries rolled out over the past few years have started to bear fruit. Though still in infancy, these sectors have huge potential to effectively kick-start the manufacturing engine for the country thus diversifying the growth drivers for the country. Growth is expected to be brisk in FY24 on the back of robust credit growth, positive capital investment cycle given the demand as well as the strengthening of the balance sheets of the corporate and banking sectors. Further support to economic growth will come from the expansion of public digital platforms and path-breaking measures such as PM GatiShakti, the National Logistics Policy, increased spending on various transportation infrastructure and the PLI schemes to boost manufacturing output. RBI expects GDP growth for FY24 to be 6.5% which will translate into general optimism in the economy and job sentiments.

Indian Real Estate Industry Overview

Real estate sector in general and housing sector in particular has always played a critical role in shaping the global economies. The multiplier effect of housing sector through direct and indirect as well as through induced impact is significantly large on both the GDP as well as employment generation. There are a number of ancillary industries which support the growth of real estate construction sector, like cement, steel, other non-ferrous metals, tiles, glass, brick, and certain consumer durables etc. Further, the industries that provide the inputs to these ancillary industries also gain momentum. Hence, due to the inter-linkages among all the sectors of economy, the overall economic impact of a real estate far exceeds the direct impact especially in employment generation.

India by virtue of its demography and development cycle is at a place where demand for quality urban housing is immense. This is only going to strengthen with each passing year as India graduates from being a low income economy to a middle income economy. As per industry estimates, India would see creation of 100 million new households who will become ‘home ownership capable by virtue of rise in income levels by the end of the decade. This creates a ‘once in a lifetime opportunity for the Indian real estate industry.

Due to the structural nature of demand, Indian real estate industry has continued to gain momentum during FY23 despite the uncertainties posed by global economic slowdown as well as steep interest rate hikes. While the market for office spaces staged a comeback in the post-pandemic period with ‘back to office normalization, the residential market further gained on the momentum seen in FY22. Despite the 250 bps repo rate hike, the robust performance of the sector especially in the housing segment signifies the strength of the underlying demand for property.

Indian Housing Market overview

Indian housing market went from strength to strength surpassing previous peaks seen during the last year. As per property research firm, Anarock Research, housing sales in 2022 grew by more than 50% YoY to 3,65,000 units, surpassing the previous peak seen in 2014 at 3,40,000 units. What is heartening to note is that this happened in a year when there was still some residual impact of the pandemic in the beginning of the year and mortgage rates went up sharply by more than 200 bps. This reinforces the view that housing demand in India is structural in nature. Sales once again exceeded launches in the top 7 cities making the available inventory at the lowest level since 2014. Launches for the year in the top 7 cities stood at around 3,60,000 units.

Rising sales coupled with falling inventory has brought the inventory levels down to 21 months in Q42023 from 32 months in

Q42014. The supply side consolidation in the industry continues to strengthen which augers well for all the participants – consumers, reputed developers as well as financial institutions. The disciplined supply has meant moderately rising capital values of homes. As per various industry reports, residential prices have increased by around 5-7% across various geographies. This positive nominal price growth has kick started the virtuous price demand cycle where, while the nominal increases have incentivised end user demand to go up but price growth being below the wage growth has continued to keep the affordability intact.

The importance of the ‘brand in real estate has continued its upward journey. Housing is increasingly becoming a branded ‘consumer product. A strong housing brand in consumers minds stands for superior product quality, avenue for life style upgrade, an aspirational address and above all certainty of timely delivery. The above can only be delivered by branded tier 1 developers, leading to the demand side consolidation. Branded tier-1 developers with strong execution capability are expected to leverage this opportunity to gain even more market share by bringing newer products suitable for the demand dynamics whilst offering quality, and a sustainable environment as well as social ecosystem.

MMR housing market overview

Mumbai Metropolitan Region (MMR) is the largest residential market in India with over 30% contribution to absorption volume and around 45% by value. Given the higher capital values and profit margins, MMR is also the most profitable market with likely accounting for over 50% of the profit pool of the residential market in Indian top-7 cities.

As per Anarock Research, MMR reported an absorption of more than 1,10,000 units, showing a growth of 44% compared to the previous year. In value terms, MMR recorded absorption of Rs. 1,570.0 bn showing a growth of 60% on a YoY basis. Similarly it recorded a launch of more than 1.25 lakh units in 2022 showing a growth of 119% compared to previous year. The strong pace of absorption has meant that the overall available inventory in the MMR is now just above 20 months of sales. Pricing growth has remained stable in the MMR market witnessing around 7% YoY growth which has kept the affordability intact given salary growth seen across most industry has been in the range of 8% to 10%.

Pune housing market overview

Pune is a hub for manufacturing activities across various industries such as automobiles, defence, engineering goods etc. It also has a presence of a large number of IT Services companies. The diversified nature of job providers has made Pune an attractive and steadily growing residential market. Pune market stood third in terms of both new launches and home sales across the top 7 cities – comprising total share of 18% and 16% respectively of overall top -7 cities. As per Anarock Research, Pune reported a 59% YoY growth in unit absorption and achieved sales of over 57,000 units. Similar to MMR, available inventory in Pune is now around 20 months of sales. Home prices in the Pune market have witnessed a growth of 5% YoY in 2022.

Bengaluru housing market overview

Bengaluru often termed as the Silicon Valley of India is home to large number of IT and Tech companies. It has witnessed significant wealth creation on the back of new age technology companies and thus making the city one of the most attractive housing markets in the country. As per Anarock Research, residential market of Bengaluru has witnessed almost equivalent number of launches and absorption of approximately 49,000 units in 2022 showing a growth of 60% and 50% respectively. Disciplined supply has made Bengaluru the city with the lowest inventory levels amongst the top 7 cities at 14 months of sales. Home prices in the Bengaluru market have witnessed a growth of approximately 7% YoY in 2022.

Indian logistics and warehousing overview

Indias logistics and warehousing industry is undergoing a dramatic transformation from a small unorganized ‘godown led industry, into a prominent asset class. Strong growth in organised retail and e-commerce, rising consumption, change in consumer buying patterns as well as ‘China+1 strategy adopted by various global MNCs have all led to a need to create an efficient supply chain infrastructure. Rollout of GST has further accelerated the formalization of the sector. Companies have started the move to be present near consumption centres rather than production centres as was the case historically. With impetus provided to manufacturing industry through various PLI schemes and diversification by global manufacturers through China + 1 strategy means that demand for industrial and light manufacturing is also on the rise.

There is currently a scramble to reduce delivery timelines by all e-commerce as well as organized retail players, substantially boosting demand for the in-city fulfilment centres. With the pandemic vaulting the e-commerce sector on a high growth trajectory and the entry of players such as the Tata Group and the Reliance Group in this highly competitive space, in-city warehouses have started becoming mainstream phenomena much earlier than anticipated.

As per Anarock Research, Grade-A warehousing space absorption is expected to grow by 15% CAGR over 2021-25 in volume terms to 85 mn sqft. On the back of strong demand, rentals are also rising by an estimated 4%-8% per annum across various top cities.


India has strong structural drivers in place for housing demand and it is at an early stage of a multi-year upcycle. Impact of cyclical factors such as interest rates etc. will be felt from time to time, however the structural nature of demand will overpower them to a large degree similar to the way industry has performed this year in spite of the steep mortgage rate hikes.

Structural nature of demand

Housing in India is expected to be both the participant as well as the driver of GDP growth over the course of the decade. Real estate contribution to GDP in India currently stands at approximately at 7% as compared to developed and mid-income economies where the contribution is in mid-teens. As India sees its per capita incomes grow from US$ 2000 to approximately US$ 5000 by end of the decade, it will move from being a low income to a mid-income economy. By then, real estate sector is also likely to find its rightful share in the economy. During the course of the decade, India is likely to witness more than doubling of the households, currently categorized as mid-income or high-income households, from 75 million to 175 million households. These 100 million new households will have incomes of above Rs. 0.5 mn and thus will be capable of owning a home. This creates a huge opportunity for the housing sector with demand coming through over the course of next decade as well. This addition in new ‘home ownership capable households will happen on account of several factors which are well understood now. Key among them are –

• Rising household incomes

• Rapid urbanization boosting urban population

• Nuclearization of families

• Improving education levels leading to rising number of STEM graduates

Our company by virtue of being one of the largest residential player in the country will be a disproportionate beneficiary of this opportunity.

Significant affordable & mid-income opportunity

Affordable & mid-income housing is poised for a significant expansion as the bulk of the household addition as explained above is expected to happen in this segment. Given our focus on the segment and our experience in delivering large scale affordable & mid-income projects makes us well prepared to capture this opportunity. We are not only among the early entrants in this segment but also the pioneers of providing high quality amenities at scale in this segment. This has helped us create a brand image of luxury even for our affordable & mid-income projects. We have two separate brands for our affordable housing projects – ‘CASA by Lodha and ‘Crown – Lodha Quality Homes. This helps us in better targeting of our different segment of customers. The current share of affordable & mid-income housing in our housing pre-sales is over 60% which is likely to inch to 70% over the course of next 3 to 5 years.

Supply & demand consolidation

This is one of the megatrends of the industry which started in 2016-17 period and has started gaining momentum over the past 3 years or so. This consolidation is unique as it is happening from both demand side as well as supply side. Due to the past experiences, consumers today have become very brand conscious and prefer to buy only from branded tier-1 developers, thus leading to demand side consolidation towards branded players. Similarly, lenders prefer to lend only to handful of branded developers. In absence of formal credit as well as customer advances, significant supply side consolidation is underway. As per Anarock Research, more than 50% of incremental supply is now coming from branded developers.

By virtue of having a strong consumer brand, our Company is able to not only get a larger share of pre-sales but also is garnering raw material i.e. land through JDA partnership mode. This will help us achieve above industry growth over medium term in a predictable manner.

Expansion into new micro-markets and cities

The ongoing consolidation is helping larger players with strong brands to expand into newer micro-markets and cities, especially companies with superior execution capabilities. Over the course of last two years, our Company has expanded into Eastern and Western suburbs of MMR as well as Pune. We have also entered the city of Bengaluru which is currently in a ‘seed phase for us with significant scale up likely after brand and team building over the next three years. Over the medium term, our aim will be to get to a 20% market share in the MMR and 15% market share in Pune. We would explore other cities to enter in a gradual manner after achieving scale in existing cities.

Product innovation

In an environment where consumers are increasingly tilting towards strong brands, it is also necessary to be in tune with their preferences. Our strong ‘customer super-team comprising of our consumer facing teams of sales, marketing and customer experience helps us be close to consumers. We are also among few residential focused companies which have their own construction management team with deep engineering talent. With this combination, we are able to quickly innovate and bring in products in synch with consumer preferences. For e.g. we saw a change in customer preference of owning homes with decks during Covid and we were among the first in supplying the market with such a product in a very short time period. Similarly, we have brought in the Villa plots in the MMR – also among the first to get such a product. Product innovation not only helps us garner more sales but also helps us churn our land asset in parallel catering to multiple product demands in tandem, thus significantly boosting our ROEs.

Threats and challenges

While we remain well placed to capture the opportunities, few challenges may have an impact on the industry in the near term. We always keep a watchful eye for any of challenges which, if they fructify, can impact the upward trajectory of the industry. Our strong management team in consultation with the board takes mitigating actions in light of such challenges. Some of these challenges in the near term could be:

• Further increase in interest rates by the Central Banks including RBI to tackle the sticky high inflation

• Escalation of geo-political tensions leading to another round of supply chain disruption

• Significant slowdown in India

• Souring of job sentiment

• Significant increase in home prices effected by developers which in turn starts to impact affordability


Our company is one of the largest residential real estate companies by pre-sales with over more than four decades of experience of delivering high quality homes with world class lifestyle. Over time we have built a consumer brand which is perceived as luxury by consumers in all the segments. We are mainly focussed on the housing segment with expanding presence in logistics and warehousing as well as facilities management. We also develop commercial real estate, as part of mixed-use developments in and around our larger residential projects to bring vibrancy to our residential developments and provide ‘walk-to-work options for our residential customers.

Over time we have built unique strengths which have helped us grow to become the largest residential real estate company and will enable us to continue our growth trajectory. Some of these are as follows:

1. Strong consumer brand

- Ability to sell at scale at launch and continue to sell during sustenance

- Nearly 20% of new sales to existing customers

- Premium pricing as compared to market

2. Superior in-house execution capability with ~50% of our over 4,000 employees focussed on engineering and, design dedicated to delivering worlds finest developments

3. Unique ability to develop townships and generate growing ‘annuity like cash flows from them

4. Presence across price points starting from H2.5 mn to H1bn+ per unit, serving a wide part of the demand

5. Strong focus on sustainability and transparency

6. Ample raw material

- Large existing land holding

- Partner of choice for land owners for JDA partnership

7. Innovation in product as well as sales and marketing strategies

8. Exceptional management capabilities with decentralized organization structure


To maximize shareholder value, our company is focused on delivering twin objectives of 20% CAGR in pre-sales and 20% ROE over the medium term. In order to achieve the twin objectives, the Company is focussing on the following –

Achieve reasonable market share in each micro-market of the cities where we operate

The ongoing consolidation has thrown growth opportunities for stronger brands like us pan India. However, in order to have strong profitability, it is important to achieve a certain scale in every city we operate. Prior to our IPO in 2021, we were present at scale in only 3 of the 7 micro-markets of MMR with insignificant presence in the rest of the 4 micro-markets and the city of Pune. Given our brand is already well recognized in these micro-markets, our current focus is to expand in the 4 micro-markets of MMR and Pune and get to our deserved market share which we believe is bare minimum 15%. Our strong brand and execution capability is enabling us to grow in capital light mode through JDAs in these under-served markets. In the last two years, we have added 23 projects in the under-served micro-markets with a cumulative GDV of Rs. 350 Bn, largely through JDAs.

Two phase expansion strategy in new cities

We will enter new cities every 3 to 4 years after achieving scale in existing cities. In order to de-risk such entry into any new city, we will have two-phase entry strategy for every new city. The first phase of the entry will be more like a three to four year ‘seed phase where we will focus on brand as well as team building and learn the local consumer preferences along with building supplier networks. We intend to start limited number of projects largely through the JDA route and focus on delivering superior product as well as customer experience. This will establish our brand in a capital efficient organic manner. The subsequent phase will involve rapid scale up when the brand is already established thus greatly reducing the risk and capital intensity of the business.

Continue debt reduction to create a strong balance sheet

Our overall growth target is secondary to our strategy of having a strong resilient balance sheet. In this regard, we will continue to reduce our net debt such that it is always below 1x of our operating cash flow or 0.5x of equity, whichever is lower. We will likely achieve these thresholds during the course of FY24. However, we will continue to reduce our leverage thereafter and create a headroom, which will enable us to capture the abundant opportunities that may come our way in a cyclically bad year for the sector.

Capital light expansion strategy through optimum mix of JDA project

We intend to leverage our brand and leadership position to grow our business by entering into JDAs with landowners and other smaller developers. We believe that such an approach will enable us to be more capital efficient and reduce our upfront land acquisition costs. We intend to follow this strategy in the MMR, Pune and Bengaluru, especially in micro-markets where we have a limited presence. In the steady state, we intend to have approximately 40% of our pre-sales from JDA projects. While projects with owned land generate ROE in the range of 15%-20%, JDA projects generate over 30% ROE. Thus an optimum mix of JDA projects would enable us to achieve our objective of 20% ROE while pursuing the 20% CAGR in pre-sales.

Focus on generating annuity income with good ROEs

In order to diversify our business, we are focusing on multiple business segments which will generate sizeable annuity income streams and create significant shareholder value over time.

Logistics & warehousing business

We are developing warehousing, logistics and, light industrials, catering to digitization of economy. To significantly scale up in this segment, we have formed a pan-India platform with Bain Capital (through India Opportunities Fund) and Ivanhoe Cambridge (arm of CDPQ) which will develop over 25 million square feet of warehousing and in-city fulfilment space over the next 3-4 years. Our efforts in this segment will also enable us accelerated monetisation of large land assets around our townships and thus enhancing capital efficiency.

Facilities management with a digital layer

We have a growing facilities management business on the back of rising number of households staying in Lodha developments. We are managing nearly 60,000 homes and given our long association, have developed deep understanding of our customers and their spending pattern. Leveraging technology, we are adding a digital layer to already established facility management business to provide seamless customer experience through an integrated platform offering several services e.g. home improvement services, real estate services, ‘near commerce etc. Over time, we will have the potential to onboard other developments of non-competing developers (in addition to our own captive developments) and add a critical mass of consumers. This will enable us to generate recurring fee income with improving ROE.

Select high quality office & retail assets

While we are primarily a residential real estate company, we also develop retail and office spaces as part of our mixed use developments. In the past, we have developed retail assets and monetized the same. In order to bring diversity to our income stream, we intend to retain some of these assets, which we believe have high probability of significant capital appreciation (in addition to their rental yield) on account of their superior location, product quality or tenant mix. Given these assets would be developed along with our residential developments on larger land parcels suitable for mixed use developments, capital intensity of the same would be significantly lower helping us generate strong ROEs.

Business Performance Overview

For the FY23, our company has achieved Pre-sales of Rs. 120.6 Bn registering a growth of 34% over FY22. 32% of the sales came from launches at new locations. The strong pre-sales performance at new locations as well as existing locations signify strong consumer intent to own a home despite steep increase in mortgage rates.


Performance for our key micro-markets in terms of pre-sales is as follows: South & Central Mumbai – In the South Central Mumbai where the Company has a significant market share, it achieved a pre-sales of Rs. 39.1 Bn (23% YoY growth). This was on the back of strong performance of the new launch at Malabar Hill as well as strong performance at existing projects such as Lodha Park, The World Towers etc. We have new launches planned in this micro-market even in FY24 which will help us grow further. Extended Eastern Suburbs: On the back of the strong performance seen in the two townships located in the Extended Eastern Suburbs of Mumbai, the Company achieved pre-sales of Rs. 22.6 Bn (16% YoY growth). We have continuously innovated in this micro-market and brought new products. In FY23, we launched plotted development at Palava which has been well received by consumers. Similarly, the launch of our ‘Crown brand at Palava which is aimed at the first time home buyers has done well. We expect significant ramp-up in Pre-sales momentum at both our townships on account of completion of several landmark infrastructure projects which will substantially improve the connectivity of the townships. Palava will benefit immensely due to commissioning of the Airoli-Katai Naka expressway in FY24 which will bring the IT hub of Airoli within approximately 20 minutes of driving distance. Some of the other notable infrastructure projects likely to get commissioned over next 2 to 3 years are – Navi Mumbai Airport, Mumbai Trans-harbour link, Kalyan – Taloja metro line. Similarly, our other township of Upper Thane is likely to benefit due to completion of Thane-Dombivli Link Road in FY24 which will bring the Upper Thane township within ten minutes driving distance of Dombivli suburban railway station thus connecting it to Mumbai through the suburban train system. Additionally, phase-1 of Mumbai - Nagpur samruddhi Mahamarg is already operational from Nagpur to Shirdi with phase-2 from Shirdi to Mumbai is likely to be operational over the next 12 months. Upper Thane being on this expressway will greatly benefit by becoming a gateway to Mumbai for the entire North Maharashtra in addition to being in close proximity to Mumbai. All these projects have the ability to propel Palava and Upper Thane at a significantly faster growth path in the medium term.

Thane: The Company achieved Rs. 12.6 Bn of pre-sales. We are in the process of augmenting supply in the micro-market given completion of few of the existing projects. In this regard, we have added two new projects in FY23 with a cumulative GDV of nearly Rs. 15.0 Bn. Our focus will be to add more GDV in coming years considering brand Lodha has a very high resonanace in consumer mind in this market.

Eastern Suburbs of Mumbai: Eastern Suburbs of Mumbai is one of the MMR micro-markets where we had no presence prior to our IPO as we had depleted our inventory. In line with our strategy of expanding into underserved micro-markets where our brand is well recognised, we started adding projects since FY22. On the back of multiple new launches in Vikhroli, Powai and Matunga, we achieved total pre-sales of Rs. 12.3 Bn in FY23 showing 764% YoY growth.

Western Suburbs of Mumbai: Similar to Eastern Suburbs, we started expanding meaningfully in this market only after our IPO. On the back of new launches in the micro-market in FY23, we achieved total pre-sales of Rs. 13.7 Bn. This micro-market is going to be one of the growth drivers for pre-sales over the next 3-5 years.

Pune: Pune is one of the success stories of our expansion strategy. We entered Pune with our first project Lodha Belmondo in the middle of last decade. Over the latter half of the previous decade, we built our brand in the city on an organic basis through superior customer experience and product delivery. During this period we learnt about the market and built our team and ecosystem in the city. On the back of the established brand, team and ecosystem, we started expanding rapidly in the city since 2021 immediately post Covid. In FY23, we achieved presales of Rs. 11.3 Bn (103% YoY) and are well on track to be among the top-3 developers by FY24 on the back of further new launches.

Other micro-markets: From other micro-markets, the Company achieved pre-sales of Rs. 832.2 Mn mainly from extended western suburbs of MMR.

Land and annuity asset monetization: We have been able to monetize our surplus land assets around our townships on a consistent basis and generate recurring cashflow from the same. For FY23, we sold land worth Rs. 6.8 Bn mainly for Digital Infrastructure usage. This creates a virtuous cycle for our nearby township residential business due to job creation or infrastructure development. We also monetized annuity commercial assets of Rs. 1.5 Bn.

Completions: Construction activity picked up after pandemic-led disruptions seen in the last 3 years. However, there were minor disruptions due to extreme commodity price volatility on the back of Russia-Ukraine war. For the FY23, we achieved completion of 9.3 msf area (58% YoY). Key completions during the year were in our townships at Palava and Upper Thane, Mira road, One Lodha Place, Crown Thane etc.

Collections: In line with strong sales growth, collections at Rs. 106.1 Bn also showed strong growth of 23% YoY. Collections will continue to grow in line with the growth in pre-sales and execution.

Business Development: In line with our strategy of expanding into the all the micro-markets, the Company added 12 projects largely through JDAs for nearly Rs. 200 Bn GDV. On account of our short timespan from acquisition of land to launch of project coupled with strong sales velocity, we have emerged as a partner of choice for various land owners in MMR and Pune. FY23 also marked as the year in which we entered Bengaluru and signed up a JDA project. We continue to have a robust business development pipeline across the MMR and Pune which gives us a strong visibility of growth in a capital light manner while we continue growing in Bangalore in measured way.

Digital Infrastructure: Our efforts to grow our digital infrastructure vertical is progressing well. FY23 saw several watershed milestones getting achieved. We concluded our platform deal with Bain Capital and Ivanhoe Cambridge during the year. The year also witnessed us monetizing our financial stake in our first JV with ESR. We also signed up few marquee tenants for warehousing space at our Palava Industrial and Logistics Park. We have a further strong leasing pipeline with advance ongoing discussions underway with several marquee tenants, giving us the visibility to start generating leasing income from FY24. Over the next 3-4 years, this platform will develop over 25 million square feet of logistics, warehousing and in-city fulfilment centre space enabling us to earn significant annuity income. As the operating partner for the platform, we will also receive fee income in the form of asset management fees, developer manager fees, facility management fees and land acquisition fees.

Achieving Minimum Public Shareholding (MPS) through secondary sale of shares via QIP: Subsequent to two primary issuances of capital in FY22 through an IPO in April 2021 and through a QIP in November 2021, Company achieved the regulatory threshold of 25% public shareholding in FY23, well in advance of the timeline, through a secondary sale of shares by the Promoters of the company. The promoters raised approximately Rs. 35.5 Bn by selling approximately 7.2% of the equity share capital of the Company through a Qualified Institutional Placement (QIP) by way of offer for sale.


Sustainability is ingrained in our vision of Building a Better Life. We give utmost importance to building responsibly and mitigating our environmental impact, while contributing to a more sustainable future for all our stakeholders. Over the past year, we continued to make significant strides towards transition to a low-carbon world and anticipate to become a Net Zero company by operations (scope 1, 2 emissions) within FY 24.

Our initiatives under the Lodha Net Zero Urban Accelerator are progressing well and we expect that they will help us achieve our decarbonisation goals well ahead of time. This was a very active year for the Accelerator where we progressed on initiatives around green concrete, circularity in the supply chain, data analysis and modelling, engagement with varied set of partners across the focus areas of the Accelerator. We expect to start publishing studies this year that can help guide the decarbonisation of built environment. During the year, we also partnered with Xynteo on the Build Ahead Coalition that aims to unite multiple stakeholders from the construction value chain to achieve net zero built environment in India.

In the previous year, we brought all our residential projects under the ambit of green certifications and this year we submitted the documentation for close to 30 million square feet of our developments, of which, we have received certificates for close to two-thirds of our developments. We anticipate that all our all active projects will be green certified during the course of FY24. We also completed our physical climate risk analysis and we have presented the forecast climate data through a climate risk toolkit to be taken into consideration by our designers while designing new projects.

With our continued efforts to make Lodha an equitable and preferred workplace for women, we are committed to achieve our gender diversity target of 44% by 2027. As a company engaged in construction activity, health & safety is always at the forefront of our operational agenda. Our stringent safety protocols and policies ensure a safe working environment for our workers across sites. Our goal of building a stronger nation is being serviced through our efforts towards unleashing the potential of young minds through Lodha Genius Programme in partnership with Ashoka University, as well as empowering women through Project Unnati.

We are determined to create a sustainable and equitable world for all our stakeholders. Our commitment towards growing sustainably also reflects in our exceptional performance in leading global sustainability benchmarks. We were ranked amongst the top ~1% of the 867 global real estate companies in the S&P Global Corporate Sustainability Assessment (CSA 2022). We received an overall ESG risk rating of 13.8 by Sustainalytics and were placed in the "low-risk" category of ESG risk severity. We also scored well in other sustainability benchmarks like GRESB where we received a 5-star rating in the Development Benchmark.

Financial Performance Overview Our results of operations

The following table provides select financial data from our consolidated statements of profit and loss for financial years ended March 31, 2023 and March 31, 2022, respectively, the components of which are also expressed as a percentage of total revenue for such periods.

For the year ended March 31


2023 (in Rs. Bn)

(% of Total income)

2022 (in Rs. Bn)

(% of Total income)

Revenue from Operations




Other Income




Total Income





For the year ended March 31


2023 (in Rs. Bn)

(% of Total income)

2022 (in Rs. Bn)

(% of Total income)


Cost of Projects



60.6 63.7%

Employee Benefits Expense



3.5 3.7%

Other Expenses



6.4 6.7%




21.8 22.9%

Adjusted EBITDA*



32.4 35.1%

Finance Costs



6.8 7.1%

Depreciation, amortisation and impairment



0.7 0.8%


Total Expenses



78.1 82.0%

Profit before exceptional item and tax



17.2 18.0%

Exceptional Items



- -

Share of Net Loss in Associate



0.0 -

Profit Before Tax



17.2 18.0%

Tax Credit/ (Expense):



5.1 5.3%

Profit for the Year



12.1 12.7%

*Adjusted EBITDA = After Grossing up of Finance cost included in cost of project.

Cash Flows

The table below summarises our cash flows for the consolidated operations for the year ended March 31, 2023 and 2022.

For the year ended March 31

Particulars (Amounts in Rs. Bn)



Net cash generated from operating activities 27.5 20.0
Net Cash Flows from Investing Activities 17.8 11.4
Net Cash Flows from / (used in) Financing Activities (37.1) (28.9)
Net Increase / (Decrease) in Cash and Cash Equivalents 8.2 2.5


As of March 31, 2023, our consolidated indebtedness is as set out below:

Category of borrowings

As at 31-Mar-23


Gross India Debt 90.4 111.2
Gross Overseas Debt - Senior notes (Secured) - 4.1
Cash & Cash Equivalent 19.7 18.2
Net India Debt 70.7 93.0
Total Gross Debt 90.4 115.4
Total Net Debt 70.7 97.1

Key Financial Ratios-

Ratios (Definition)

FY23 FY22

% Change

Reason for change

Trade Receivables Turnover (Revenue from Operations/ Average Trade Receivables)




Decrease in Trade Receivables Turnover Ratio is mainly due to increase in trade receivable compared to last year.

Inventory Turnover Ratio - Cost of project / Average of Inventory




Decrease in Inventory Turnover Ratio is mainly due to increase in Inventory.

Interest Coverage Ratio - (Earnings before Interest Expenses#, Depreciation and Tax (excludes Exceptional Item) / Interest cost)




Improvement in Interest coverage ratio is mainly on account of decrease in Interest cost.

Current Ratio - (Current Assets/ Current Liabilities)




Improvement in Current ratio is due to increase in Current Assets.

Debt-Equity Ratio - Debt / Total Equity (Share Capital + Applicable Reserves)




Improvement in Debt Equity ratio is due to reductions in Total Debt.

Operating Profit Margin (%) - Earnings before Interest Expenses#, Tax, & Exceptional Item less Other Income / Revenue from Operation




Decrease in Operating Profit Ratio is due to decrease in profit before tax compare to last year.

Net Profit Ratio - Profit After tax / Total Income




Decrease in Net Profit Ratio is due to decrease in profit after tax compare to last year on account of exceptional items.

Return on Net Worth Ratio - Profit after tax / Average of total Equity




Decrease in Return on Equity Ratio is due to decrease in profit after tax compare to last year on account of exceptional items.

#Interest cost represents finance cost debited to statement of Profit and Loss and interest cost charged through cost of projects

Risks and Mitigation Rise in interest rates

Risk: In order to contain inflation, global central banks have increased policy rates significantly throughout FY23. RBI has also raised Repo rate by 250 bps in FY23, steepest ever hike in a year. This has also led to mortgage rates rising by over 200 bps. Any further steep rise in mortgage rate could impact the industry volumes adversely.

Mitigation: While mortgage rates have risen steeply to 8.5%-9%, volumes have continued to grow at a rapid pace with a modest price increase. This suggests a strong structural nature of the demand for quality housing. Given the safe nature of mortgage lending, there is a strong competition among the lenders in this segment. On account of this, transmission of policy rate hikes has lagged and it is likely that complete transmission may not happen even going ahead. Additionally, given the cycling down of the inflation, it is possible that the RBI will pause its monetary tightening and look to reduce policy rates in the latter half of the year. Coupled with the strong structural demand drivers, consolidation in the industry and partial transmission of policy rate hikes, the impact of the further increase in policy rates will be muted. In order to help our consumers to get on the housing ladder, we had rolled out a scheme where we bear the impact of increase in mortgage rates (upto 150 bps from 6.99%) for two years. Beyond two years, wages increasing by 8%-10% annually will be able to address increased EMI consequent to increase in interest rate. The cost of absorption for us has been less than 30 bps of pre-sales annually making it like an insurance against the rise in mortgage rates with a minimal cost to us. We can likely restart this scheme in some form in case there is a significant increase in mortgage rates. This will greatly reduce any residual adverse impact from rising mortgage rates.

Slowing economic growth

Risk: Indias housing demand is closely linked to job sentiments which in turn is related to overall health of the economy. On account of the steep increase in policy rates, we have seen global growth come down with talks of some of the developed economies getting into a recessionary zone. Slowing global growth coupled with RBIs policy rate hikes, have seen slowing down of the Indian economy. Any worsening of job sentiments in a slowing economy either due to loss of white collar jobs or inadequate salary growth could lead to slower housing demand.

Mitigation: Indian housing is a domestic industry with domestic demand drivers with limited impact of global economy. While there has been impact of slower global growth on the Indian economy, it is still expected to be the fastest growing economy with approximately 6.5% growth rate for FY24. While the growth in hiring has come down, it is still in positive territory – thus keeping the job sentiments still robust. The strong structural drivers for housing, consolidation in the industry coupled with the all-time best affordability will likely negate any adverse impact of economic slowdown to a large extent. We remain watchful of the situation on the ground and our strategy around sizing as well as timing of new launches on the one hand and ability to adjust the same should enable us to address any such eventuality if it plays out. This will reduce the risk of slowdown to a large degree on our business health.

Cyclicality of the Industry

Risk: Real estate is considered to be a capital intensive industry impacted by overall macro cycles and thus being cyclical in nature. Currently, the cycle is at the start of a multi-year upswing. However, due to slowing economy, the cycle may take a short pause, impacting the overall business for the industry.

Mitigation: Cyclicality of the industry can be mitigated by keeping a robust balance sheet. We are on a journey to reduce our net debt to be below 1x of our operating cash flow or 0.5x of equity, whichever is lower. We will likely achieve these thresholds during the course of FY24. However, we will continue to reduce our leverage thereafter and create a headroom. This will enable us to capture the abundant opportunities that may come our way in a cyclically bad year for the sector.

Worsening of Geopolitical tensions

Risk: Any flare up of the geopolitical tensions especially in Russia-Ukraine war could have an impact on the global growth and return of energy price inflation which in turn feeds into overall inflation making the task of policymaking tougher. Any material escalation could once again impact the global supply chain and have adverse impact on global trade.

Mitigation: While signs of any further flare up in geopolitical tension are not presently visible, if it happens, will likely see a knee-jerk reaction in prices of commodities in general and energy in particular. However, as our experience of the past year has shown, such dislocations may not sustain for a longer term. Construction cycle by virtue of being a 3-4 years cycle will likely adjust with minimal impact from such an issue. Secondly, real estate has a completely local supply chain barring high speed elevators which are imported. Thus, supply chain disruptions may not have any material impact on the business. As an ongoing effort, we continue to increase diversification in our sourcing of materials which helps us address such events.

Concentration Risk

Risk: Historically, we have been present in the residential segment within three micro-markets of MMR in a meaningful manner. Any adverse impact on the residential segment or the three micro-markets of MMR could result in adverse outcome for our company.

Mitigation: We are diversifying our geographical presence by expanding in all the micro-markets of MMR as well in the city of Pune. We have also entered Bengaluru in FY23 which will start contributing significantly after three years of ‘seed phase. This geographical diversification also diversifies our customer profiles. Mumbai is home to corporate head offices, BFSI, high value consulting, entertainment, large SME base with some minimal IT services. Our expansion in Pune has provided us diversification into customer base which is employed into manufacturing, defence, automobile and mid-end IT services. On the other hand, our expansion into Bengaluru which is the technology hub of India, provides us diversification into customer base which is employed into the high-end IT services, and new age startup ecosystem. Similarly to bring further diversification, we are developing digital infrastructure which includes warehousing, logistic etc. as well as scaling up our facilities management business. While we will continue to be residential focussed company, we will generate a sizeable annuity income from digital infrastructure and facilities management business.


While the FY20-22 period saw unprecedented disruption on account of the pandemic, FY23 was largely a normal year in terms of operating environment. However, it saw the fastest ever monetary tightening seen in the last two decades. The demand has remained robust and intent of Indian consumers to own a home remains strong as ever. Consolidation of the industry continues to accelerate with more than 50% of incremental new supply now coming from branded developers. This consolidation is expected to continue even going forward especially in context of rising interest rates. Early read through of FY24 demand suggest continuation of the strength seen in the housing demand in FY23. Your company is on track to deliver 20% growth in pre-sales on a consistent and predictable manner and FY24 will follow the same trajectory. We would see launch of new projects in underserved micro-markets of MMR and Pune as well as select project launches in Bengaluru. High visibility of project launches in new micro-markets will likely help us achieve our growth objectives. We also have a robust business development pipeline largely through JDAs for the FY24 which will serve us well to deliver growth beyond FY24 as well. On the back of robust demand and easing of interest rates in the latter half of the year, we expect pricing growth to remain in 6%-8% range for the year which will further boost sentiments towards owning a home.

We are also rapidly scaling up our digital infrastructure platform in partnership with Bain Capital and Ivanhoe Cambridge (an arm of CDPQ). We expect the lease rentals from the platform to commence in FY24 which is expected to ramp up significantly over the next 3-5 years.

Internal Controls

The Company has a robust internal financial control system commensurate with the size, scale and complexity of its operations. It has put in place adequate controls, procedures and policies for ensuring orderly and efficient conduct of its business including adherence to policies, safeguarding its assets, reasonable framework aimed at prevention and detection of frauds and errors, accuracy and completeness of accounting records. Appropriate frameworks have been designed to have internal controls over financial reporting, which ensures the integrity of financial statements of the Company and reduces possibility of malpractice.

Design of key processes and various policies are reviewed periodically, from the point of view of adequacy of controls. The Company has in place an Internal Audit (IA) function headed by the Chief Internal Auditor. The internal audit plan for the year is approved by the Audit Committee at the start of the financial year.

The Management Audit Committee (MAC) meeting reviews the detailed internal audit reports prior to placing the same before the Audit Committee. The MAC is chaired by the MD & CEO and co-chaired by the CFO and the other functional heads are invitees to the meeting as and when required. The Audit Committee oversees the scope and coverage of the IA plan, and evaluates the overall results of these audits during the quarterly Audit Committee meetings. The functional leadership team members join the meeting as and when necessary to provide updates on developments regarding the status of controls and compliance within their respective functions.

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.

A certificate from the CEO and CFO form part of the Corporate Governance Report, confirming the existence and effectiveness of internal controls, and reiterating their responsibility to report Deficiencies to the Audit Committee and rectify the same.

Human Resources

At Macrotech, we believe that our people and our "We Care" culture strengthen our processes and operations and are central to our continued success. We are committed to build and further enhance skills of our people and provide them with a safe, inclusive, caring and an unbiased environment. Our workplace culture fosters creativity, agility, innovation and meritocracy. We respect and are committed to uphold human rights of all our stakeholders - employees, subsidiaries, suppliers and other partners.

We had 4,200 permanent employees as on March 31, 2023 – an increase of 25% over FY22. For more details on our employee practices and processes refer to the Human Capital section on pg 136 and the BRSR on pg 219 of the Integrated Report.