Record profit masks thin presales growth and reliance on land sales

PAT ₹1373.1 Cr vs ₹676.3 Cr Q1 FY26 = 103% growth. However, INR 600 Cr came from land sales (44% of total PAT).

Revenue ₹4996.7 Cr vs ₹3491.1 Cr Q1 FY26 = 43.1% growth confirmed.

EBITDA ₹1920 Cr on revenue ₹5000 Cr = 38.4%. Management cited adjusted EBITDA ₹21.5 Cr with 43% margin, suggesting different accounting.

Confirmed from call, below trend due to deliberate launch hold. Represents weakness in organic residential momentum.

If land contributed 44% of PAT, residential-only PAT ≈ ₹767 Cr on ₹4400 Cr residential revenue ≈ 17.4% NPM. Excluding land, adjusted margin is lower than claimed.

Digital Edge deal INR 420M/acre vs INR 210M in 2025; management targets INR 650M fair value by 18 months. Prior guidance did not assume this value uplift.

Now ₹2-3 Cr annual land sales expected going forward (vs prior exceptions). Palava data center 150 acres @ INR 600M/acre = ₹90 Cr future sales.

Exit rate ₹3 Cr → target ₹30 Cr by FY32 (10x); prior call did not quantify path. Still early-stage; leasing not yet commenced.

Q1 presales ₹46.3 Cr annualizes to ₹185 Cr, below ₹240 Cr guidance; H2 must deliver 46% of annual vs historical 50%. Middle East impact extended; planned launches delayed.

Assumed conflict ends Q1; it didn't. Demand impact still contained (4-5% of sales) but duration risk priced in; construction cost inflation 1-1.5% if persists.

Land sales INR 1,200 Cr; 85-90% revenue recognized; PAT contribution ≈ INR 600 Cr. All 660 acres approved under Maharashtra Green Data Center policy.

Global demand is strong; data center capacity now attracts demand. 3 GW power tied up; further incremental power being worked on. Operators AWS, STT, Digital Edge presence validates location.

Impact contained but duration extended. Guidance maintains ₹240 Cr; will review once war ends. Cannot forecast when/how war ends or demand response.

Leasing to conclude this fiscal year. Strategy is powered shell only; operators/hyperscalers do MEP/HVAC/fit-out. Not competing on chips/racks (capital-heavy, obsolescence risk).

Zero freshwater used. All recycled water; MMR generates 3,500 MLD recycled water (thrown to sea). Infrastructure buildout could support 40+ GW data centers if tapped.

Data center was virtually 0 two years ago, now 600 acres. Plus 1,000+ acres unallocated. Uses flexible; residential expected to accelerate post-connectivity (Airoli/Mulund/bullet train).

Early 30s, within 32-34% guidance range. Full-year margins expected early 30s; this quarter elevated due to half-annual land sales front-loaded.

Modest capex ₹500-700 Cr over 3 GW buildout (not per-acre). Most of sales price converts to cash flow after tax.

No competition on powered shell; others don't offer it. Lodha providing land + powered shell (unique). Own boxes expected to start physical activity calendar 2026.

MMR: Middle East impact abated; back to normalized closure of high-value sales. Bangalore: launch this quarter ahead of expectations. NCR: launch H2 FY27; cautiously optimistic.

Power density 11-15 MW/acre currently, evolving upwards. 660 acres at current density = 7.3-9.9 GW. 3 GW power tie-up committed; can build without new contracts.

Primary needs: contiguous land, power, recycled water, and ecosystem. Others can compete with same assets, but Lodha has early mover advantage, relationships, and infrastructure already built.

Early prices were below market to create location (investment in ecosystem). Market price ≈ INR 650M/acre; Digital Edge at INR 420M is moving towards market. Capex 10-15% of sales price is value-add.

Power procurement complex; rapidly evolving. Lodha not ultimate consumer (operators are). Working closely with clients/experts on strategy; not yet finalized.

Not raised despite strong Q1 (delivered 33% of full-year). Implies presales must accelerate H2; geopolitical risk acknowledged.

This quarter early 30s ex-land, within range. Full-year guided early 30s; current quarter elevated due to land sales front-loading.

Self-funded from land sales; does not add to group leverage. Powered shell build starting calendar 2026.

Pre-sales ₹46.3 Cr only +4% YoY; full-year guidance ₹240 Cr requires 46% in H2 (vs 50% historical). Geopolitical delay in Q1 launches plus NRI headwind (4-5% of sales) pose risk of missing annual target.

Land sales contributed ₹600 Cr PAT (44% of total). Management disclosed this is ~half annual expected land sales, front-loaded in Q1. If geopolitical improves or data center demand softens, land sales may not repeat at this pace, causing sharp PAT decline.

Middle East conflict ongoing (not ended by Q1 as assumed); NRI demand subdued. Construction costs may rise 1-1.5% if conflict persists, with 35-75 bps EBITDA impact. Duration risk unquantifiable; could extend through FY27.

Powered shell leasing expected to conclude FY27; has not yet started. Rental income ramp from ₹3 Cr (exit rate) to ₹20+ Cr by FY32 is unproven. Data center remains early stage; AWS/STT/Digital Edge are co-tenants, not direct competition, but ecosystem risk if tenant demand slows.

Reported PAT margin 26.9% is inflated by 44% land sales contribution. Residential-only margin (ex-land) appears ~17% on ₹44 Cr estimated residential revenue, well below claimed early 30s embedded margin. If presales growth remains soft and pricing concessions needed, embedded margins will compress below guidance.

Palava is key growth engine (data centers, residential upside post-connectivity). MMR remains dominant (home base). Geographic expansion (Bangalore, Pune, NCR) addresses this, but Palava delays would impact revenue.