LODHA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.6

📊 Financials: Lodha has a market cap of ₹1,08,929 Cr. EPS stands at ₹22.9 with ROE of 13.2% and ROCE of 14.6%. Debt-to-equity ratio is 0.54, showing moderate leverage. Quarterly PAT fell from ₹644 Cr. to ₹336 Cr., reflecting a -14.7% decline.

💰 Valuation: Current P/E is 47.7, well above the industry average of 33.7, suggesting overvaluation. Book value is ₹202, giving a P/B ratio of ~5.4. PEG ratio of 1.66 indicates growth is priced in but not cheap. Dividend yield remains low at 0.40%.

🏢 Business Model & Advantage: Lodha is a leading real estate developer with strong brand equity and execution capabilities. Its competitive edge lies in premium housing projects and a large land bank. However, sector cyclicality and demand sensitivity affect stability.

📈 Technical Zone: Current price ₹1,091 is below DMA 50 (₹1,148) and DMA 200 (₹1,220), indicating weakness. RSI at 30.9 suggests oversold conditions. Entry zone could be considered near ₹1,035–₹1,080 if fundamentals align. Long-term holding requires caution due to high valuation.

Positive

• ✅ Strong brand presence in premium real estate
• ✅ Moderate debt-to-equity ratio (0.54)
• ✅ Healthy ROE (13.2%) and ROCE (14.6%)

Limitation

• ⚠️ High P/E (47.7) compared to industry average (33.7)
• ⚠️ Weak dividend yield (0.40%)
• ⚠️ Profit decline in recent quarter (-14.7%)

Company Negative News

• 📉 Quarterly PAT dropped from ₹644 Cr. to ₹336 Cr.
• 📉 FII holding reduced by -0.78%

Company Positive News

• 📈 DII holding increased by 0.54%
• 📈 Strong execution track record in housing projects

Industry

• 🏗️ Real estate sector remains cyclical and interest-rate sensitive
• 🏗️ Industry P/E at 33.7, lower than Lodha’s valuation

Conclusion

🔎 Lodha shows decent fundamentals with manageable debt and steady ROE/ROCE, but its valuation is stretched with a high P/E and weak dividend yield. Technicals suggest oversold conditions, making ₹1,035–₹1,080 a potential entry zone. Long-term investors should be cautious, focusing on margin of safety and monitoring profit growth before committing to extended holding.

Would you like me to extend this with a peer benchmarking overlay against other major real estate developers, or a basket scan to identify undervalued sector opportunities for rotation?