The Japanese brokerage firm highlighted solid earnings visibility supported by the right capital-allocation strategies as well as clear revaluation triggers.
Nomura expects pre-sales growth at a 20% compound annual growth rate (CAGR) for FY25-26.
Macrotech Developers also has sufficient potential to exceed business development targets to sustain growth in the future.
Palava is expected to benefit from infrastructure upgradation, leading to growth in both volume and value.
The stock is currently trading at 32 times fiscal year 2025 enterprise value-to-EBITDA, according to Nomura.
According to the brokerage, key risks include a possible slowdown in India's residential market or delays in upgrading infrastructure around Palava.
Jefferies has also given a 'buy' rating to Macrotech and a price target of Rs 3,000 by FY29. It said Macrotech is a key beneficiary of the ongoing housing upcycle.
“Pre-sales are rising at a 15% to 20% medium-term compound annual growth rate (CAGR) due to restructuring in land values on township land, as well as entry into new geographies, which are the key valuation drivers,” Jefferies wrote in its note due in early March 2024.
The realty firm's net debt rose 43.5% to Rs 4,320 crore during the first quarter of this fiscal due to higher investments in land acquisition and construction.
According to an investor presentation, the company's net debt stood at ₹4,320 crore as of June 30, 2024, while it was ₹3,010 crore at the end of March quarter of 2023-24.
Net debt stood at Rs 4,320 crore, at 0.24 times equity, well below the maximum limit of 0.5 times equity, the presentation said.
The company had said last month that net debt had increased due to investments in growth.
Mumbai-based Macrotech Developers, which sells its projects under the Lodha brand, is one of the leading developers in the country.
Shares of Macrotech Developers closed 3.42% higher at ₹ 1,238 on Friday. The stock has gained nearly 60% in the last 12 months.