Geographic diversification, Palava to support Lodha growth, says Nuvama

Lodha Developers stock: This momentum, analysts believe, is underpinned by increasing geographic diversification, a broad-based product portfolio, & emerging value-unlocking opportunities at Palava.

Nuvama on Lodha Developers: Real estate developer Lodha Developers is steadily strengthening its growth profile, with presales set to rise at a healthy ~20 per cent pace over the medium term, analysts said. 

 

This momentum, analysts believe, is underpinned by increasing geographic diversification, a broad-based product portfolio, and emerging value-unlocking opportunities at Palava. 

 

Despite early signs of softening housing volumes in the Mumbai Metropolitan Region (MMR) and Pune, Lodha’s execution track record and balance sheet strength support Nuvama’s continued conviction, with a reiterated ‘Buy’ rating and unchanged target price of ₹1,580.

 

Once a predominantly MMR-centric developer at the time of its initial public offering (IPO), Lodha has evolved into a more balanced, pan-India player. While the MMR remains its core market, contributing around 65 per cent of presales, this share has been steadily declining as the company scales up in Pune and Bengaluru. Notably, Lodha is preparing for its entry into the National Capital Region (NCR), which should further diversify its sales mix. 

 

 

Over the long term, the contribution from MMR is expected to reduce to nearly 50 per cent, improving resilience across housing cycles. Adding to this advantage is Lodha’s ability to cater to the entire spectrum of residential demand, with offerings ranging from affordable homes to ultra-luxury residences with ticket sizes spanning ₹1 crore to over ₹100 crore.

 

Operationally, key growth enablers are firmly in place. The company has already achieved its FY26E business development target of ₹25,000 crore in gross development value (GDV) additions in the first half of the year, providing strong visibility for future launches. Lodha’s swift turnaround from land acquisition to project launches has enabled FY26E launch GDV to nearly double compared to FY25. This growth is being pursued without stressing the balance sheet, with net debt-to-equity maintained at a conservative 0.25x.

 

A major pillar of future value creation lies in Palava, analysts noted. Infrastructure upgrades in and around the region are steadily improving connectivity with Mumbai, enabling premiumisation of housing projects. Management expects Palava alone to deliver annual presales of around ₹8,000 crore by 2030, with Ebitda margins of nearly 50 per cent.

 

Beyond residential development, Palava offers a powerful optionality through data centres (DCs). India’s DC capacity is projected to almost double from ~1.12 GW currently to ~2.1 GW by CY27, with Mumbai retaining its dominance due to strong demand and negligible vacancy. Maharashtra’s policy incentives further strengthen Mumbai’s position as India’s DC hub. 

 

Lodha has earmarked 400 acres in Palava for DC development, positioning itself as a key enabler in the rapidly expanding digital infrastructure ecosystem. As this ecosystem matures, value unlocking at Palava is expected to accelerate meaningfully, reinforcing Lodha’s long-term growth thesis.

 

  Disclaimer: The view/outlook has been suggested by Nuvama. Views expressed are their own.