Macrotech Developers rallies over 5% as Jefferies expects substantial long-term growth

During Friday’s trading session, the shares of Macrotech Developers Limited zoomed by 5.54%. Additionally, the stock hit a fresh 52-week high mark of Rs 1,225 apiece on BSE. The company’s current market capitalisation is Rs 1,14,969.55 crore.

Recent development:

Jefferies emphasized that the inauguration of the Mumbai Trans Harbor Link marked a significant milestone as the first mega project for Macrotech Developers. This infrastructural upgrade, valued at over USD 70 billion, is set to enhance connectivity in Mumbai.

Jefferies, in its research note, also highlighted the strategic advantage of Lodha’s extensive 4,300-acre land bank on the outskirts of the city. This substantial land holding positions the company favourably, especially considering the doubling of land prices over the past three years, indicating potential long-term upside.

Adding to the positive prospects, Jefferies noted the anticipation of a boost from an ‘affordable housing policy,’ further contributing to the optimistic outlook for residential sales.

About the company:

Macrotech Developers Ltd is a prominent player in the real estate development sector, solidifying its position as one of the largest developers in India. The company has a significant presence in key markets, including the Mumbai Metropolitan Region (MMR) and Pune. Specializing in real estate development, Macrotech Developers has played a pivotal role in shaping and contributing to the real estate landscape in these regions.

Product Wise Break-Up

The company’s revenue is predominantly derived from property development, comprising 93.01% of total income. The strategic sale of land and development rights contributes 4.52%, while lease rentals and the sale of building materials add 0.58% and 0.46%, respectively.

The revenue structure is diversified, with various segments like developmental projects, financial services, and technology services, among others. This diversified income approach highlights the company’s adaptability and engagement across multiple sectors, driving overall financial performance.

Shareholding pattern:

Over the past year, there has been a notable upward trend in Foreign Institutional Investor (FII) holdings, demonstrated by the increasing percentages of 13.93%, 19.42%, 18.98%, 19.83%, and 20.52% in September 2022, December 2022, March 2023, June 2023, and September 2023, respectively.

This observed upward trend in FII holdings reflects a heightened level of confidence, serving as a positive indicator for retail investors.

Furthermore, the stock has witnessed significant buying activity as it has given multibagger returns of more than 136% in the last 1 year.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.