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HDFC Securities
Mahindra Lifespaces (Buy)
Target: ₹773
CMP: ₹494.60
Mahindra Lifespaces Developers Ltd (MLDL) reported operationally strong quarter with pre-sales value/volume growing 77 per cent/67 per cent sequentially to ₹350 crore, driven by four new launches. For FY21, MLDL registered de-growth in pre-sales value/volume of 15 per cent/25 per cent as H1-FY21 was impacted due to Covid-19.
Labour availability has reduced to 60 per cent and is expected to ramp up by Q1-FY22 end as Covid-19 impact reduces. Over last 9M, MLDL has added 3 land parcels with nearly ₹1,500 crore pre-sales potential and is in advance stages of negotiation on land parcels with preslaes potential of ₹4,500 crore.
Residential presales/IC business leasing guidance of about ₹2,500 crore/₹500 crore annually by FY25 remains intact.
MLDL is undergoing changes on multiple fronts: the recent revamp of the management team, invigoration of new land acquisitions, which shall lend visibility to growth, go to market traction on current captive land bank, and new larger launches across MMR, Pune, Chennai and Bengaluru.
Given strong growth trajectory, robust balance sheet, trustworthy brand and tailwinds for organised players, we remain constructive on Mahindra Lifespaces.
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