Nomura Recommends Buy on Macrotech Developers, Projects 30% Upside

Nomura has assigned a "Buy" rating to Macrotech Developers stock, setting a target price of ₹1,600 per share. The brokerage attributes this to strong earnings visibility, driven by efficient capital allocation strategies. Nomura also pointed out clear re-rating catalysts and anticipates a 20% CAGR in pre-sales growth over FY25-26.

Furthermore, Nomura sees significant potential for Macrotech to exceed its business development targets, ensuring steady future growth. The Palava project, poised for infrastructure improvements, is expected to benefit from both increased volumes and price appreciation, according to the brokerage.

Currently, Macrotech shares are trading at 32 times its estimated 2025 EV/EBITDA. However, Nomura cautioned that risks such as a potential slowdown in the residential market and delays in infrastructure upgrades around Palava could impact performance.

Macrotech Developers specializes in property development, with a focus on commercial, residential, and mixed-use projects, as well as constructing integrated communities.

Recently, the company announced plans to acquire a 100% equity stake in Opexefi Services Private Ltd and One Box Warehouse Private Ltd, through Share Purchase Agreements (SPAs). These acquisitions, valued at ₹46.7 crore and ₹49 crore respectively, will bring both entities under Macrotech's full ownership, making them wholly owned subsidiaries.

Opexefi Services, founded in December 2018, and One Box Warehouse, established in October 2023, are involved in the development of logistics parks and warehouses. However, neither company has recorded any business operations or turnover in the past three years.

In the latest trading session, Macrotech Developers shares closed 3.4% higher at ₹1,238 on the NSE. Year-to-date, the stock has gained 17%, outperforming the Nifty, which has risen 14%. Over the past 12 months, Macrotech's stock has surged 59%, compared to Nifty's 28% increase.

Macrotech Developers Ltd is a prominent real estate developer in India, primarily focusing on residential real estate, particularly in affordable and mid-income housing segments. Most of its revenue comes from its operations within India.