Macrotech Developers Q2 Results Review

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Macrotech Developers Ltd. reported a headline loss of Rs 9.3 billion on account of write off in UK investments amounting to Rs 11.7 billion.

We note that Macrotech Developers now expects Rs 10 billion (versus Rs 15 billion) in pending repatriation from UK assets over next 12-15 months.

New disclosure of embedded Ebitda margin on presales is a welcome move; indicating the true profitability and free cash flow potential of current operations.

This underpins our blended valuation approach whereby we arrive at our target net asset value for residential business basis average of multiple (enterprise value / Ebitda basis embedded economic profitability of presales) and NAV premium methodology.

Operationally, the quarter delivered on most accounts with presales increasing 12% QoQ / up 57% YoY at Rs 31.5 billion. New joint development arrangement formation remains on track with H1 FY23 signings at Rs 93 billion (FY23 target of Rs 150 billion).

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