Lodha's margin stayed high in a quarter with no land sale to lift it

Lodha Developers earned an operating margin of 33.3% in the September 2026 quarter, measured as operating profit over reported sales rather than the company's own EBITDA measures. What makes the figure worth a holder's attention is what was missing from it. Management said the quarter contained no land sales. The quarter before had included a land transaction and posted a higher margin still. Stripped of that help, the margin still finished 3.0 percentage points above the best of the three quarters that preceded the land deal.

That result is behind the company's new confidence on profit. Management said it expects to beat comfortably its guidance of 20% growth in net profit this financial year. Applied to last year's filed profit, that guidance works out to about ₹4,117 crore, calculated from the filed results. First-half net profit was ₹2,386 crore, already 58% of that figure. Abhishek Lodha, the managing director, declined to give next year's guidance but said the business has "a higher profitability in the business, which is not a one-off for this year."

Asked what drives the improvement, he said that raising prices by about 6% a year while costs rise by about 4% adds one to two percentage points of margin annually. Prices so far this year are up about 4%, below the pricing range the company guided for in July and level with the cost growth he cited.

One quarter without land income cannot by itself show how much of the higher margin will last; management says the improvement is not limited to this year.

The sales side of the plan has not yet been earned in the same way. Presales are the value of homes sold in a period, whether or not they have been built. The company kept its guidance of about ₹24,000 crore of presales for the year after selling ₹9,600 crore in the first half. The remainder is 25.3% more than it sold in the second half of last year. Management expects about ₹6,000 crore to ₹7,000 crore of development presales in each of the next two quarters, against a record ₹5,890 crore in last year's fourth quarter, and counts a data-centre land sale of about ₹1,500 crore, expected in the fourth quarter, inside the guidance. Management said one project's launch seems to have slipped from the fourth quarter into the next financial year, though it said this does not change its presales outlook.

Cash follows the same pattern. The company kept its guidance for operating cash flow of about ₹8,500 crore, which leaves roughly ₹5,800 crore to come in the second half. Management said cash flow picked up in the second half last year too. The profit guidance is largely covered by what has already been booked; the sales and cash guidance still depend on launches arriving on schedule and the land sale closing.