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LODHA - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.8
📊 Financial Overview
- Profitability: PAT declined from ₹644 Cr to ₹336 Cr QoQ, with a negative profit variation of -14.7%. EPS stands at ₹22.9.
- Return Metrics: ROE at 13.2% and ROCE at 14.6% reflect solid capital efficiency for a real estate developer.
- Valuation: P/E of 52.3 is above the industry average (42.4), indicating premium valuation.
- P/B Ratio: With a book value of ₹202 and price of ₹1,198, P/B is ~5.93, suggesting a high valuation multiple.
- PEG Ratio: 1.81 signals moderate overvaluation relative to earnings growth.
- Debt Profile: Debt-to-equity ratio of 0.54 is reasonable for the capital-intensive real estate sector.
- Momentum: RSI at 49.3 and MACD at -0.78 suggest neutral sentiment with potential for consolidation.
🏢 Business Model & Competitive Edge
- Lodha Group (Macrotech Developers) is one of India’s largest real estate developers with a strong presence in residential and commercial segments.
- Its focus on premium housing, township development, and strategic land banks offers long-term scalability.
- Brand strength, execution capability, and partnerships with global investors enhance its competitive positioning.
💡 Entry Zone Recommendation
- Current price is near DMA 50 (₹1,193) and slightly below DMA 200 (₹1,250), indicating a consolidation phase.
- Suggested Entry Zone: ₹1,150–₹1,180 for accumulation on dips.
- Long-term holding is viable given strong brand, execution strength, and urban housing demand.
✅ Positive
- Strong ROE and ROCE for a real estate company.
- DII holdings increased by 0.54%, showing rising domestic institutional confidence.
- Strategic land bank and premium project pipeline support future growth.
⚠️ Limitation
- High P/E and PEG ratios suggest valuation caution.
- QoQ PAT decline may reflect project completion delays or seasonal factors.
- Modest dividend yield of 0.35% may not appeal to income-focused investors.
📉 Company Negative News
- FII holdings declined by 0.78%, indicating cautious foreign sentiment.
- Stock has corrected ~22% from its 52-week high of ₹1,534.
📈 Company Positive News
- Strong brand recall and execution in key metro markets.
- Focus on affordable and mid-income housing aligns with government incentives and urban demand.
🏭 Industry
- Real estate sector benefits from rising urbanization, low interest rates, and government push for housing.
- Industry P/E of 42.4 supports moderate valuation for quality developers.
🧾 Conclusion
- Lodha is a leading real estate developer with strong fundamentals, brand equity, and urban growth exposure.
- Entry near ₹1,150–₹1,180 offers a reasonable long-term opportunity, though valuation remains elevated.
- Monitor project execution, institutional flows, and macro housing trends for sustained performance.
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