Lodha Developers Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

6 Abhishek Lodha, Anand Kumar, Chintan Parekh, Prashant Bindal, Sanjay Chauhan, Sushil Kumar Modi

Analysts

8 Abhinav Sinha, Akash Gupta, Biplab, Gaurav Khandelwal, Kunal (Bank of America), Kunal Lakhan, Parikshit Kandpal, Pritesh Sheth

Financials & KPIs

Note: Management states accounted PAT will not trend-line quarterly - revenue is a function of sale-proceeds receipts, construction cost incurred per plant, and land/annuity transaction closings, none of which arrive evenly across 12 months.

Geographic & Segment Commentary

• Mumbai/MMR (Residential): Dominant home base; premium and luxury segments contributed ~60% of sales. The Mulund-Airoli-Palava Freeway (Airoli within 20 minutes, Mulund within 25 minutes) and Upper Thane Connector to Viviana Mall open post-monsoon, expected to unlock higher-category residential pricing from Q4 with meaningful impact in early FY28. Management plans 5-7% price increases across micro-markets this year with 100-200 bps additional pricing headroom.

• Bangalore & Pune: Bangalore is entering its growth phase - the July launch was the first of the year and performed ahead of expectations at a price point ~30% above existing market levels. Two Pune launches are planned. New cities (Bangalore, Pune, NCR) are targeted to contribute 30-45% of pre-sales in the medium term.

• NCR: First launch scheduled in H2 FY27; management is "cautiously optimistic" based on the successful entry playbook from Pune and Bangalore. NCR will make Lodha a four-city developer in FY26-27.

• Data Centers & Land: 660-acre Green Data Center Park with 3 GW tied-up power at $0.06-0.08/unit, five fiber-optic routes, five transmission lines, and Maharashtra Green Integrated Data Centre Policy approval. Approximately 130 acres sold (AWS, STT, Digital Edge India); ~150 acres to be monetized over the next 3-4 years at ~₹60 crore/acre, generating ~₹9,000 crore of sales; ~300 acres of additional optionality. Overall land sales of ₹2,000-3,000 crore annually expected for several years.

• RentCo/Annuity: June exit run rate was ~₹300 crore (excluding data centers), targeting ₹3,000 crore+ by FY2032 - ₹2,000 crore+ from data centers, ₹600 crore from retail/offices, ~₹400 crore from warehousing/industrial. Assets under development are largely performing ahead of underwriting.

• LandCo: Being formalized to monetize surplus land for non-competing users (e.g., back office at Palava, affordable housing) at price points around ₹50 crore/acre from FY28, benefiting from new connectivity and bullet train commencement.

Company-Specific & Strategic Commentary

• Data Center Value Creation: Digital Edge India (JV of Digital Edge Singapore and NIIF) entered the Palava park at ₹42 crore/acre vs ₹21 crore/acre in CY2025 - almost doubling in under 12 months. Palava land value has risen more than 15x over five years. Management pegs fair market value at ~₹65 crore/acre, targeted within ~18 months. Early price points were deliberately below market to establish the location and ecosystem.

• Self-Funded RentCo Build: The 1 GW powered-shell build-out on ~90 acres is funded entirely from data center land sales within the same park - it does not add to group leverage or compete with DevCo for capital. Powered shell leasing for the first balance-sheet box is expected to conclude in FY27; strategy is confined to powered shell (not turnkey/MEP/HVAC or chip/rack deployment) to avoid capital intensity, technology obsolescence and depreciation risk.

• Capital Allocation & De-leveraging: Stated hierarchy: fund DevCo opportunities (20% RoE) and RentCo (15% RoE), regular dividend at 15-20% of PAT, then debt reduction, then surplus toward buybacks/special dividends. DevCo targeted to be effectively net debt-free in 2-3 years against an unsold GDV of ~₹2 lakh crore.

• LandCo Formation: Surplus land monetization for non-competing uses (back office, affordable housing) is being structured as a recurring pillar alongside data center sales, with connectivity and the bullet train (partial operations from August 15, 2026) as catalysts.

• Brand & Knowledge Initiatives: Launched the Lodha Theoretical Physics Institute - India's first privately funded institution of its kind, headed by Professor Jainendra Jain, the first physicist of Indian origin to receive the Wolf Prize. Completed the fourth edition of the Lodha Genius Program with 400+ students in association with IISER Pune and Ashoka University NCR.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Data Center Land Sale Economics

• Question: What was the value and margin of land sales recognized this quarter? (Pritesh Sheth, Axis Capital)
• Answer: Total land sales pre-sales including data center and other sources were ~₹1,200 crore; revenue recognition was 85-90% of that due to site completion activities pending for buyers. PAT contribution from land sales was ~₹600 crore. The 660 acres is fully approved as a green data center park by the Government of Maharashtra. (Sushil Kumar Modi; Abhishek Lodha)

Rental Targets & Powered Shell Yields

• Question: Was the rental target revised down given the INR 20 billion data center number? (Pritesh Sheth, Axis Capital)
• Answer: No change - the ₹3,000 crore+ FY32 run rate is 10x the ₹300 crore June exit; the breakdown is unchanged (₹2,000 crore+ data centers, ₹600 crore retail/office, ₹400 crore warehousing/industrial) and current projections carry upside potential. Powered shell rentals should be a little over ₹2 crore per MW annually. (Abhishek Lodha)

Data Center Global Demand & India Positioning

• Question: What prompted the expanded capacity and how is demand shaping up? (Abhinav Sinha, Jefferies)
• Answer: Demand is global, not regional - operators compare India against Virginia, Scandinavia and Johor. India's advantages: under 3 years from breaking ground to operational vs 4.5-5 years in the West; ~half the construction cost; proactive central/state governments (including tax exemption for data center usage outside India). The park's credibility is validated by AWS, STT (Temasek/KKR-backed) and Digital Edge India (NIIF JV, 49% Government of India-owned). Management is developing US clientele and expects first balance-sheet box leasing in FY27. (Abhishek Lodha)

Palava Connectivity & LandCo Timing

• Question: Timing of premium inventory price uplift at Palava? (Abhinav Sinha, Jefferies)
• Answer: The freeway is physically ready, opening post-monsoon, which will drive improved connectivity from Airoli and Mulund. Higher-category residential unlock will surface from Q4 with meaningful impact likely in early FY28; bullet train partial operations from August 15, 2026 add a further catalyst. Calendar 2027 is when significant impact is expected, including for LandCo. (Abhishek Lodha)

FY27 Guidance Resilience & Middle East Impact

• Question: Does the pre-sales guidance factor sustained Middle East impact, and is there upside if the war ends? (Kunal Lakhan, CLSA)
• Answer: The impact so far is contained, but duration has extended beyond the earlier assumption. Guidance is maintained. Management will reassess only once the conflict actually ends and the nature of the resolution is known - hard to underwrite an end-scenario hypothetically. (Abhishek Lodha)

Data Center Leasing & Capital-Light Strategy

• Question: When does leasing commence and what type of demand is being seen? (Kunal Lakhan, CLSA)
• Answer: Leasing for the first powered-shell box should conclude this fiscal year; talks are ongoing with a couple of large operators. Strategy is limited to powered shell (physical box + power to one point); MEP/HVAC (turnkey) is 2+ years out at best, and chip/rack deployment is explicitly out of scope due to capital intensity and technological obsolescence/depreciation risk. (Abhishek Lodha)

Palava Land Allocation Strategy

• Question: Is Palava shifting structurally from residential toward data centers? (Akash Gupta, Nomura)
• Answer: 1,000+ acres already developed for residential, ~600 acres earmarked for data centers, and 3,000+ acres remain unallocated - future allocation will be market-driven. LandCo will add ~₹50 crore/acre monetization for back-office/affordable housing from FY2028, alongside data center land sales at similar price points. (Abhishek Lodha)

Margins Ex-Land Sales & Land Sale Pipeline

• Question: What were embedded margins excluding land sales, and how does the land sale pipeline look? (Gaurav Khandelwal, JPMorgan)
• Answer: Embedded margins ex-land sales were low-30s/early-30s, within the guided 32-34% range. Q1 margins were inflated because ~half of the full year's planned land sales were forward-loaded; full-year margin guidance of early 30s stands. Data center demand exceeds current supply - "there is more demand than we can currently supply." (Sushil Kumar Modi; Abhishek Lodha)

Land Sale Cash Conversion & Infrastructure CapEx

• Question: How much CapEx is required on land sold to data center clients, and how does it convert to cash? (Parikshit Kandpal, HDFC Securities)
• Answer: Net cash flow effectively equals the sales price adjusted for tax. Common-park infrastructure CapEx (not box-specific) is ~₹500-700 crore incurred over time for the full 3 GW build. Several buyers (AWS, STT, Digital Edge) have completed design, tendering and approvals, with some commencing site activity; Lodha's own powered-shell construction starts this calendar year. (Sushil Kumar Modi; Abhishek Lodha)

Data Center Competitive Moat & Power Density

• Question: Can other developers with large land parcels and power tie-ups replicate this? (Biplab, Emkay Global)
• Answer: Key requirements are contiguous land, power and recycled water - but the ecosystem built over several years, infrastructure already in place, and relationships with capacity builders create a clear competitive advantage. Current power density is 11-15 MW per acre; the existing 3 GW tie-up is sufficient for the current park, and density is trending upward with technology evolution. (Abhishek Lodha)

Land Price Re-rating Rationale

• Question: What drove the doubling of land price in 12 months - market or unique offer? (Kunal, Bank of America)
• Answer: Early price points (₹21 crore/acre) were deliberately set below market to create and establish the location and ecosystem. Having incurred that cost, pricing is now moving toward fair market value of ~₹65 crore/acre, expected within ~18 months. Lodha incurs ~10-15% of the sales price in infrastructure/make-ready costs at current levels. (Abhishek Lodha)

Key Takeaway

Lodha reported its best-ever quarter with revenue of ₹5,000 crore (+43% YoY), adjusted EBITDA of ₹2,150 crore (43% margin) and PAT of ₹1,370 crore (2x YoY, 26.9% margin), boosted by forward-loaded land monetization (₹1,200 crore pre-sales, ~₹600 crore PAT). Residential pre-sales of ₹4,630 crore grew only 4% YoY as launches were deliberately deferred through the Middle East conflict; FY27 pre-sales guidance of ₹24,000 crore was reaffirmed with Q2 at ₹5,000 crore+ and H1 at 40-42% of the year. Strategy rests on three engines: DevCo (₹2 lakh crore unsold GDV, ROE toward ~20%, net debt-free in 2-3 years), data center monetization (660-acre park; 130 acres sold; ~150 acres at ~₹60 crore/acre over 3-4 years generating ~₹9,000 crore; fair value ~₹65 crore/acre), and RentCo (₹3,000 crore+ FY32 run rate, 10x June exit, self-funded). Net debt-to-equity fell to 0.2x with collections up 46% YoY. Key watch-points: prolonged Middle East conflict (1-1.5% construction cost inflation, 35-75 bps project EBITDA impact) and H2 launch execution across NCR, Bangalore and Pune.