Detailed Rationale

Crisil Ratings has assigned its ‘Crisil AA/Stable’ rating to the Rs 1000 crore non-convertible debentures (NCDs) of Lodha Developers Ltd (LDL; Formerly known as Macrotech Developers Ltd) and has reaffirmed its ‘Crisil AA/Stable/Crisil A1+’ ratings on the existing non-convertible debentures and bank facilities of the company.

 

The ratings reflect sustenance of the comfortable business risk profile, driven by strong net sales bookings, continued liquidation of inventory, robust launch pipeline and healthy collections from sold projects. The ratings also factor in the strong financial risk profile of LDL as indicated by continued deleveraging, ample liquidity and strong financial flexibility.

 

The operating performance of LDL is expected to remain strong after achieving collections of ~Rs 13,070 crore and cash flow from operations of ~Rs 7,000 crore (excluding cash flow from annuity business and taxes) in fiscal 2025. This marks a nearly 30% increase in collections and ~40% increase in cashflow from operations from fiscal 2024 level. The current business momentum is supportive as witnessed in sales reaching ~Rs 17,600 crore in fiscal 2025, showcasing nearly 23% increase over fiscal 2024. This growth is driven by sustained demand momentum, strong product launch pipeline and continued liquidation of unsold inventory. Further, the company achieved pre-sales of Rs 9070 crore in the first half of fiscal 2026, showing a 9% year-on-year growth. Collections were Rs 5,650 crore for first half of fiscal 2026, showing a growth of 11% year-on-year.

 

The growth is expected to remain strong going ahead as well, supported by healthy launch pipeline in the Mumbai Metropolitan Region (MMR), continued inroads made in Pune and upcoming projects in Bengaluru. Further, the group targets net annuity income of around ~Rs 1500 crore by fiscal 2031, having clocked ~Rs 150 crore in fiscal 2025 from commercial properties, facility management business and digital Infrastructure, which should support overall cash flow of the company.

 

The financial risk profile has continued to improve, driven by sustained focus on deleveraging and strong operating performance. The gross debt moderated from Rs 7,680 crore as on March 31, 2024, to about Rs 7,100 crore a year later. Lease rental discounting (LRD) debt forms 15-17% of the overall debt of the company. Gross debt (excluding LRD) to cashflow from operations (excluding cash flows from annuity business) improved from 1.4 times in fiscal 2024 to approximately 0.8 time in fiscal 2025.

 

Although, the debt increased to Rs 9,624 crore as on September 30, 2025, with rise in scale of operations and disbursement proceeds, however, the company plans to fund its investments in land and towards building up the annuity portfolio. Through its strong operational cash flow, the overall debt is expected to normalise to Rs 8,700-8,900 crore this fiscal with scheduled repayments and refinancing of loans. As a result, the gross debt (excluding LRD) to cashflow from operations (excluding cash flow from annuity business) is expected to remain below 1.1 times in the medium term, supported by robust liquidity profile.

 

Liquidity is supported by strong cash and bank balance of around Rs 3,900 crore as on September 30, 2025, which includes minor cash earmarked for project development in RERA accounts and around Rs 240 crore of encumbered cash, along with undrawn fund-based working capital bank facilities of nearly Rs 480 crore for the 12 months ended September 30, 2025. Consequently, net debt was ~Rs 5,600 crore as on September 30, 2025, with net debt (excluding LRD) to cashflow from operations (excluding cash flow from annuity business) expected to remain below 1 time in the medium term.

 

The company also had 4,200 acres of land reserves, equivalent to around 600 million square feet (mn sq ft) of development potential around its townships as of September 2025. However, this will lead to concentration of 20-25% of its medium-term launch pipeline within Palava and Upper Thane, an emerging micro-market, which will be monitorable.

 

The ratings continue to reflect the established brand and strong market position of LDL in the real estate segment in MMR. These strengths are partially offset by exposure to geographical concentration risk, in addition to cyclicality and regulatory risk.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of LDL and its subsidiaries, joint ventures (JVs), and associates (based on the consolidated financials of LDL). This is because these entities, collectively referred to as LDL, have common promoters and are in the same business.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers - Strengths 

Established brand and strong market position in the real estate segment in MMR

Lodha has a presence of over four decades in the real estate market of MMR and is known for large developments, quality construction and good salability. As of March 2025, the group developed and delivered more than 100 million sq ft, mostly in the residential segment, and has around 115 million sq ft of projects under construction or planned in the development business. The group continues to leverage its leadership position to become a partner of choice for landowners through JVs or joint development agreement (JDA) projects. The company added projects with gross development value (GDV) of Rs 23,700 crore in fiscal 2025.

 

Its market position is further underpinned by the large, low-cost, land bank of around 4,200 acres across MMR, which supports profitability of projects. Strong operating efficiency, aided by internal construction capabilities, further reduces cost and improves the ability to manage the pace of construction.
 

Comfortable financial risk profile along with healthy financial risk flexibility

The financial risk profile has continued to improve, driven by sustained focus on deleveraging and the strong operating performance. The gross debt moderated from Rs 7,680 crore as on March 31, 2024, to ~Rs 7,100 crore a year later. LRD debt forms 15-17% of the overall debt of the company. Gross debt (excluding LRD) to cashflow from operations (excluding cash flows from annuity business) improved from 1.4 times in fiscal 2024 to approximately 0.8 time in fiscal 2025.

 

Although, the debt as on September 30, 2025, increased to Rs 9,624 crore with rise in scale of operations and disbursement proceeds, the company plans to fund its investments in land and towards building up the annuity portfolio and through its strong operational cash flow. The overall debt is expected to normalise to Rs 8,700-8,900 crore this fiscal with scheduled repayments and refinancing of loans. As a result, the gross debt (excluding LRD) to cashflow from operations (excluding cash flows from annuity business) is expected to remain below 1.1 times in the medium term, supported by robust liquidity profile.

 

Along with this, quality of the debt profile has further improved by refinancing and pre-payment of high-cost debt with the average cost of debt improving to about 8.00% as on September 30, 2025, as against 9.37% as on March 31, 2024. The company targets to maintain the cost of debt at 8% in the medium term.

 

Financial flexibility is supplemented by the group's demonstrated refinancing ability, its access to unutilised working capital fund-based bank limit of over Rs 480 crore, cash and bank balances of around Rs 3,900 crore (as of September 2025), ability to raise funds through equity and land parcel of around 4,150 acres in township projects.

Key Rating Drivers - Weaknesses 

Geographical concentration in revenue 

LDL’s reliance on the real estate market of MMR has been high with nearly 80% of collections received from this region in fiscal 2025. However, significant slowdown in demand or oversupply in the region could weaken revenue prospects in the future. Further, 20-25% of the launch pipeline for the medium term is expected to be in Palava and Upper Thane, an upcoming micro-market, which poses concentration risk. However, the company is slowly focusing on diversifying its geographic reach within Pune and Bengaluru and is expecting to enter a new market. However, the extent of geographical diversification in the revenue profile will remain monitorable.

 

Susceptibility to cyclicality and regulatory risks in the real estate sector

Cyclicality in the real estate segment causes fluctuation in cash inflow. As against this, cash outflow towards projects and debt obligation are relatively fixed, resulting in substantial cash flow mismatch. Any decline in pace of bookings could lower the expected collections in the medium term.

 

The real estate segment is further characterised by multiplicity of property laws and non-standardised government regulations across states, and thus operations are exposed to regulatory risk.

Liquidity Strong

The group has sufficient liquidity, supported by healthy saleability and collections, both in ongoing projects and new launches and has strong financial flexibility to service scheduled debt obligation of around Rs 1,400 crore in fiscal 2026 and around Rs 2,500 crore in fiscal 2027. It has unsold ready-to-move-in residential inventory of ~Rs 4,400 crore, along with pending collections of more than Rs 18,600 crore from sold inventory as on September 30, 2025. The company is also targeting to generate annuity income from office and retail assets, warehousing, industrial parks, and the facility management business, which will lend robustness to cash flow. It also has a fully paid-up land bank of around 4,200 acres against which additional debt can be raised, if required. Undrawn working capital fund-based bank limit of around Rs 480 crore, undrawn working capital non-fund-based bank limit of around Rs 700 crore and the ability to refinance existing debt at a low cost or raise funds through issue of equity, and cash and equivalents of around Rs 3,900 crore as on September 30, 2025, support liquidity.

ESG Profile

Crisil Ratings believes the ESG profile of LDL supports its already strong credit risk profile.

 

The real estate sector has a significant impact on the environment owing to high emissions, waste generation and impact on land and biodiversity. The sector also has significant impact on social factors given its labour-intensive operations and safety issues in construction related activities.

 

LDL has an ongoing focus on strengthening the various aspects of its ESG profile.

 

Highlights:

• LDL has committed to reduce absolute scope 1 and 2 emission by 97.9% by fiscal 2028 and scope 3 emission intensity (per square metre of area developed) by 51.6% by fiscal 2030, compared with its fiscal 2022 baseline. These targets are validated by the Science Based Targets Initiative (SBTi)
• In fiscal 2025, its absolute scope 1 and 2 emissions stood at 3180 TCO2e, which was 79% lower compared with its fiscal 2022 baseline
• As part of its decarbonisation efforts, the company is also expanding its electric vehicle charging infrastructure. It has commissioned 150 electric vehicle charging stations, commissioned across its project sites in fiscal 2025
• The company has also reported that ~99% of the waste generated (1,60,145.55 MT) is being recycled/reused in fiscal 2025
• The company achieved ~83% reduction in standing assets water consumption intensity (kilo litres per sq ft) in fiscal 2025 w.r.t to fiscal 2020 as well as 100% of wastewater being treated and recycled through sewage treatment plants across all developments
• The company reported 0.04 LTIFR for workforce and zero workforce fatality in fiscal 2025, which was better than its listed peers
• LDL also reported a gender diversity of 19.1% for permanent employees and attrition rate of 22.3% in fiscal 2025, which was in-line with its listed peers. Also, the company has set a target to achieve 30% gender diversity (excluding construction management team)
• Its governance profile is characterised by 44% of board being independent,11% women in board of directors, presence of a board level ESG committee, split in chairman and CEO positions and extensive financial disclosures

 

There is growing importance of ESG among investors and lenders. LDL’s commitment to ESG principles will play a key role in enhancing stakeholder confidence, given its high foreign portfolio investor shareholding (~20%) and access to capital markets.

Outlook Stable

Crisil Ratings expects LDL will generate healthy cash flows through new launches and liquidation of inventory while preserving its market leadership in the absence of any large, debt-funded capital expenditure.

Rating sensitivity factors

Upward factors:

• Sustained improvement in the business risk profile, backed by healthy sales and collections, along with continued well-balanced distribution of projects in different stages
• Continued robust financial risk profile as reflected in low gross debt (excluding LRD debt) to cashflow from operations ratio, while maintaining adequate liquidity

 

Downward factors:

• Weakening of the financial risk profile with gross debt (excluding LRD debt) to cashflow from operations, remaining above 1.5 time on a sustained basis
• Sizeable outflow towards business development and commercial projects, leading to higher-than-expected debt or lower-than-expected liquidity.
• Material weakening in business risk profile triggered by slackened saleability of projects or substantial delay in project execution or cash flow risk from emerging micro markets

About the Company

LDL is one of the largest real estate developers in India. Established since 1980s, it has developed properties more than 100 million sq ft, mostly in MMR. It has sold real estate worth more than Rs 1,10,000 crore over fiscals 2014 to 2025. Founded by Mangal Prabhat Lodha, LDL is now managed by his son, Abhishek Lodha (managing director and chief executive officer).

Key Financial Indicators- Crisil Ratings-adjusted-consolidated

Particulars	Unit	2025	2024
Operating income	Rs crore	13791	10325
Profit after tax (PAT)	Rs crore	2767	1535
PAT margin	%	20	14.9
Adjusted gearing	Times	0.4	0.46
Adjusted Interest coverage	Times	6.3	1.64*

*Expenses include a one-time write-off of loan provided for UK business operations. If excluded, Adjusted Interest coverage would be 3.16

Any other information: Not applicable