Lodha Developers has received a ‘Buy’ rating from Jefferies with a target price of Rs 1,215, suggesting an upside of about 54% from the current market price. The brokerage’s analysis points to a strong combination of steady residential growth and a fast-emerging data centre business at its Palava township, which could drive both land value gains and long-term rental income. Jefferies believes government policy support, low power costs, and rising demand from global cloud players will accelerate this business from FY27, creating a new revenue stream alongside the company’s core housing operations.
Lodha Developers’ stock has remained under pressure across multiple time frames despite its long-term gains. Over the past 1 month, the stock has declined by about 8%, while the 6-month fall stands at over 28%. So far in 2026, the stock is down nearly 23%, and on a 1-year basis, it has slipped more than 26%. However, the longer-term trend still reflects strong wealth creation, with the stock rising nearly 213% over the past 5 years.
Lodha Developers’ share price performance
| Time Period | Price Change (Rs) | % Change |
| Past 1 month | -Rs 72.40 | -8.03% |
| Past 6 months | -Rs 326.35 | -28.23% |
| Year to date | -Rs 243.25 | -22.67% |
| Past 1 year | -Rs 293.05 | -26.10% |
| Past 5 years | +Rs564.90 | +212.89% |
Jefferies builds its case around the Palava site, where Lodha has lined up nearly 400 acres of land with a potential capacity of around 3 gigawatts for data centres. A portion of this land has already been sold to large global players, and construction activity has begun, giving early visibility to the project’s progress.
The brokerage notes that Palava enjoys a rare mix of advantages that are hard to replicate. These include proximity to Mumbai’s dense fibre network, access to multiple power transmission lines and a ready water supply, all of which are critical for running large data centres efficiently.
“Data Centre work underway… our site visit showed construction having started at the site for one of the hyperscalers,” Jefferies said in its report.
This early execution reduces uncertainty around timelines, which often weighs on infrastructure projects.
Jefferies on Lodha Developers: Scale-up expected from FY27
The brokerage expects the business to gather real momentum from financial year 2027 onward, driven by policy support and rising demand from global technology firms.
Jefferies points out that both state and central governments have taken steps to support data centre investments. Maharashtra’s green data centre policy and long-term tax clarity from the central government have improved the economics of such projects.
At the same time, demand for cloud computing, artificial intelligence workloads and digital services continues to rise, pushing hyperscalers to expand their footprint in India.
“Government support to Datacenters through the Green DC policy by Maharashtra state and the central government’s 20-year low-tax clarity, along with rising demand for data centre space, can drive significant scale-up in Lodha’s DC business in FY27,” Jefferies said.
Jefferies expects new deals, both for land sales and for built-to-suit facilities, to be announced in the first half of financial year 2027, which could act as near-term triggers.
Jefferies on Lodha Developers: Power costs give it an edge
A key pillar of the investment thesis lies in power economics. Data centres consume large amounts of electricity, and even small cost differences can significantly impact profitability.
At Palava, Lodha benefits from an effective power cost of around Rs6 per unit, which Jefferies describes as among the lowest globally. This is made possible by the company’s distributor status and access to a high share of green energy under the policy framework.
“Power economics remain the key differentiator, driven by distributor status and the ability to consume 90% green power under the Green DC policy, with effective power cost at Palava for data centres estimated at around Rs6 per unit, among the cheapest globally,” Jefferies said.
Lower power costs not only improve operating margins for tenants but also allow Lodha to command better pricing when it sells land or leases built facilities.
Jefferies on Lodha Developers: Land prices could jump sharply
The brokerage sees a sharp rise in land valuations as the data centre ecosystem develops at Palava.
Over the past few years, land prices at the site have already moved up significantly. Jefferies now expects transaction values to climb further, potentially reaching around Rs75 crore per acre over the next one to two years.
Part of this increase will come from the value created by infrastructure and policy support, while another part will reflect the pricing power that comes with lower operating costs for tenants.
“Part of the power cost benefits will be retained by Lodha in future land deals with transaction values expected to jump 3-4x over the next 1-2 yrs,” Jefferies said.
This rise in land prices provides a near-term earnings boost through outright sales.
Jefferies on Lodha Developers: Large recurring income in sight
Beyond land sales, the bigger prize lies in building and leasing data centre facilities.
Jefferies says Lodha plans to reinvest cash generated from land monetisation into developing powered shell data centres, which are then leased to operators. This model generates steady rental income over time.
The brokerage expects the company to build out close to 1 gigawatt of capacity over roughly five years, with leasing happening in chunks of 50 to 100 megawatts.
Even in its base case, the brokerage has factored in a smaller initial build-out of around 200 megawatts between financial years 2027 and 2029, which could generate about Rs500 crore in annual lease income.
This creates a steady cash flow stream that complements the more cyclical residential business.
Jefferies on Lodha Developers: Valuation sees meaningful upside
Jefferies assigns a value of about Rs140 per share to the data centre business alone, which accounts for roughly 30% of the estimated value of the Palava township.
The rest of the valuation comes from the core residential business, which continues to deliver strong sales and margins. The brokerage values this segment at around Rs675 per share based on earnings multiples.
Together, these pieces support the target price of Rs1,215 per share.
“Datacentre raises visibility on Palava valuation and data centre valuations can substantially increase as the powered shell business scales up,” Jefferies says.
The brokerage also notes that ongoing infrastructure developments around Palava, such as connectivity projects, could further lift residential demand and pricing in the area.
Jefferies on Lodha Developers: Core housing business remains strong
While the data centre story draws attention, Jefferies does not lose sight of Lodha’s primary business.
The company has a development pipeline of around Rs 2,00,000 crore and is clocking annual sales of roughly Rs 20,000 crore, with expected growth in the range of 15% to 20%.
This steady base provides financial strength and supports the company’s ability to invest in new segments such as digital infrastructure.
The brokerage also points to improving margins driven by premium project launches and better pricing trends, which could lift profitability over the next few years.
Conclusion
Jefferies’ report presents Lodha Developers as a company moving beyond its traditional residential roots, with a large data centre business beginning to take shape at Palava. The combination of low power costs, favourable policies and strong demand for digital infrastructure gives the project a solid foundation.
At the same time, the residential business continues to deliver consistent growth, providing balance to the overall story. With both near-term triggers from land sales and longer-term gains from leasing income, the brokerage sees enough headroom to justify its Buy rating and target price of Rs1,215, pointing to meaningful upside from current levels.
Disclaimer: The investment analysis and target price mentioned are based on reports by Jefferies and do not constitute an offer or solicitation by this publication. Equity investments, particularly in sectoral stocks like real estate, carry market risks; please consult a SEBI-registered investment advisor before making any financial decisions. Past performance of the stock is not a guarantee of future results, and all projections are subject to regulatory and market volatility.
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