Motilal Oswal Keeps Buy on Lodha, Target Rs 1,375; Shares Rise Over 6%

What happened

On 3 November 2026, shares of Lodha Developers Ltd, formerly Macrotech Developers Ltd, rose more than 6% after Motilal Oswal maintained its 'Buy' rating and a target price of Rs 1,375. The brokerage describes Lodha as its preferred pick among large developers.

The target is lower than the Rs 1,430 target Motilal Oswal had set on 27 July 2026. The note explains the change through its assumptions rather than through a cut in sales forecasts. It kept its presales and collections estimates but raised the weighted average cost of capital for the residential portfolio to 11.3% and the cap rate for the annuity portfolio to 8.0%. Those higher rates reduce the value the model gives to the company's assets, so the target falls even though sales estimates are unchanged.

The note is a broker's research view. It is not a statement from the company.

The brokerage's valuation view

Motilal Oswal applies a 20% premium to the net asset value (NAV) of the residential business, which it considers justified. It says the segment could command a premium of about 40%. According to the note, any further rise in that premium would depend on the pace at which new projects are added in coming quarters.

The note also points to Rs 409 billion of launched inventory yet to be sold, which it says supports sales in the near term. It cites Rs 2 trillion of unsold gross development value (GDV) in the company's development business, which it says reduces the need to buy land quickly.

Motilal Oswal expects presales of Rs 60-70 billion in each of the next two quarters.

Company results behind the call

Lodha reported consolidated net profit of Rs 1,013 crore for the quarter ended 30 September 2026, up 28.3% year on year. Revenue from operations rose 17.6% to Rs 4,468 crore. For the first half of FY27, profit after tax was Rs 2,386 crore, up 63%, and revenue was Rs 9,460 crore, up 30%.

Q2 FY27 pre-sales were Rs 5,037 crore, up 10%, and collections were flat at Rs 3,450 crore. Per the note, collections were flat year on year at Rs 34.5 billion. Net operating cash flow fell 39% to Rs 8.8 billion in the quarter. Management has guided operating cash flow of Rs 85 billion for FY27.

Net debt stood at Rs 5,279 crore as of 30 September 2026, giving a net debt-to-equity ratio of 0.2x. The company's credit rating is AA (Stable), with seven upgrades since 2021.

Lodha Pantheon, the Gurugram office project

Lodha Pantheon is the company's first project in Delhi-NCR, a Grade A++ commercial office development on Golf Course Road in Gurugram, Haryana. It sits on a 1.2-acre site and is planned across 27 floors with about 4 lakh sq ft of saleable area. Floor plates range from 13,000-15,000 sq ft to 20,000-25,000 sq ft.

The project cost is Rs 1,100-1,200 crore, which press reports commonly round to Rs 1,200 crore. The company says it sells office spaces to buyers rather than holding them for rental income. Its finance executive said business houses in Gurugram want to buy workspaces rather than take them on long-term lease.

The company said the project was launched a few days before a 31 October 2026 interview. Its total financial contribution has not been disclosed.

Palava land and the data-centre plan

The brokerage's view is tied to Lodha's plan to monetise land in Palava, where the company holds about 3,700 acres across Palava and Upper Thane. Business Standard reported on 27 July 2026 that the company plans to raise Rs 10,000 crore from land sales over three to four years on about 150 acres for data-centre use. Other reports cite Rs 9,000 crore.

Recent land deals include Digital Edge in June 2026 at about Rs 42.5 crore per acre, against about Rs 21 crore per acre in an earlier 2025 transaction. Amazon Data Services India bought 10.6 acres in Palava for Rs 125.13 crore in June 2026.

ICICI Securities, in a note dated 2 November 2026, kept its BUY rating and target of Rs 1,388 unchanged. It highlighted the second-half FY27 launch pipeline and the Palava data-centre opportunity, which it says includes about 660 acres of shovel-ready, 3 GW data-centre land.

What it means for buyers and investors

The note is a broker's valuation view and does not change any project's price, possession timeline or terms. For investors, it highlights three points: presales are expected to stay steady, cash flow is weaker in the quarter than profit growth suggests, and the second-half recovery in cash flow depends on execution and on the sale of Palava land.

Motilal Oswal's note links the second-half cash-flow recovery to better execution and Palava land monetisation. Its assumptions for the residential business depend on continued project additions.

What comes next

• Second half of FY27 (October 2026 to March 2027): management plans to launch 17 projects with total estimated GDV of Rs 190.7 billion across its key markets.
• Festive-season launch in the NCR region, followed by further launches in new locations, according to the company.
• A Sohna Road housing project in Gurugram, planned for launch in the fourth quarter of FY27 (January to March 2027).
• The Motilal note expects a Rs 15 billion data-centre land transaction in the fourth quarter of FY27.
• Palava data-centre land sales are planned over three to four years, according to the July 2026 announcement.