Realty firm Macrotech Developers Ltd aims to cut its net debt by nearly 40 per cent to around Rs 5,000 crore by the end of this calendar year with the help of surplus cash flow from strong housing sales, a top company official said.
Mumbai-based Macrotech Developers, which is one of the leading real estate firms in the country, markets its properties under the Lodha brand.
In an interview with PTI, Macrotech Developers MD and CEO Abhishek Lodha sounded bullish on the long term growth potential of India's residential real estate market.
Sales bookings and cash flows have been very strong so far this fiscal year, resulting in reduction in debt by Rs 753 crore in the December quarter to Rs 8,042 crore, he said.
"We are hoping to reduce debt further by Rs 1,000 crore by end of this fiscal year to about Rs 7000 crore," Lodha said.
The company plans to cut debt by Rs 500-800 crore every quarter.
"We will hope to be close to Rs 5,000 crore of net debt sometime by end of this calendar year," Lodha said.
However, he added that there is no plan of becoming a zero-debt company.
On the overall operational performance during the current fiscal so far, Lodha said the company has done well in all three key metrics—sales bookings, embedded EBIDTA margin and addition of new land parcels for future development.
"In pre-sales, we had a strongest ever third quarter with sales of over Rs 3,000 crore. So far, we have done over Rs 9,000 crore of sales in the first nine months of this fiscal, which is more than the sales we did for full year of FY'22 and puts us on course for exceeding the guidance for FY'23 which is Rs 11,500 crore," he said.
Macrotech Developers' sales bookings rose 16 per cent to Rs 3,035 crore in the December quarter.
The company sold properties worth Rs 9,039 crore in the first three quarters of this fiscal year as against Rs 5,570 crore in the corresponding period of the previous year.
The bulk of sales bookings or pre-sales came for housing projects.
Lodha said the embedded EBIDTA margin was 31 per cent in Q3 and 33 per cent during April-December. "If we translate it for the full year, it will lead to almost Rs 3,500 crore plus of EBIDTA."
On new business development, Lodha said the company has already added many land parcels so far this fiscal that can generate sales revenue of an estimated Rs 17,800 crore as against the full-year new business development guidance of Rs 15,000 crore.
Asked about fresh sales guidance for FY23, Lodha said the company is now on course to exceed the FY'22 target but has not set any new goal.
The demand for residential properties continues to rise on strong consumer sentiments, Lodha said, adding that consolidation of supply-demand has been happening towards trusted developers.
Similarly, the company has not set any new target for project additions for the full FY'23 but there will be some land acquisitions.
Macrotech Developers acquires land outright and also forms joint ventures with landowners to create land banks for future development.
The company will continue to focus on the Mumbai Metropolitan Region (MMR) and Pune markets. It has recently forayed into the Bengaluru residential market with one housing project and is in talks to add another one.
Last week, Macrotech Developers reported a 41 per cent increase in its consolidated net profit at Rs 404.98 crore for the quarter ended December 2022.
Its net profit stood at Rs 286.38 crore in the year-ago period.
However, the total income fell to Rs 1,902.44 crore in the third quarter of this fiscal from Rs 2,155.70 crore in the corresponding period of the previous year.
Macrotech Developers has delivered around 90 million square feet of real estate and is currently developing around 107 million square feet under its ongoing and planned portfolio.
