Buy This Bluechip Real Estate Stock, Says India's Top Broking House

Broking firm Sharekhan has placed a buy call on the stock of real estate firm, Mahindra Lifespace Developers for good gains of nearly 20% from current levels.

Lucrative deal with parent company

According to Sharekhan, Mahindra Lifespace Developers has entered into a lucrative land deal admeasuring 9.24 acres at Kandivali with its parent M&M with favourable payment structure (Rs. 325 crore plus 7% interest p.a. payable on outstanding principal) to be paid over three years post initial upfront payment.

"The predominantly 1.7msf saleable area residential project has potential revenue generation of Rs 2,500 crore (conservatively) over the next 5-7 years. The first phase of 0.5msf is expected to be launched in Q4FY2023 or Q1FY2024," Sharekhan has said.

Robust pipeline of projects

Mahindra Lifespace Developers has 2.5-3msf of planned project launches (phases of Alcove and Vicino, MWC Chennai affordable housing project, first phase of Kanakpura at Bengaluru, Pimpri at Pune, Luminare at NCR and additional phases of Tathawade, Pune) having close to gross development value of Rs. 2,000 crore by H1FY2023.

"The strong response received from Kalyan 2 project (launched 700 apartments out of 1,500 in February) would add to its pre-sales pipeline from Q4FY2022. Projects in Dahisar, Kandivali, phases of projects in Pune, and new business developments in FY2023 would aid in maintaining a strong launch pipeline in FY2024," Sharekhan has said.

Buy the stock with a price target of Rs 340 per share

According to Sharekhan, Mahindra Lifespace Developers is poised to scale up its sales and execution with a strong management team at the helm of having credible experience in the respective fields.

"Further, the company is expected to benefit from the government's relentless focus on affordable housing segments, rising affordability levels, favourable state government policies for real estate, and ample inorganic growth opportunities. The company's low gearing can be utilised to raise debt to fund land acquisitions. Hence, we retain our Buy rating on the stock with an unchanged price target of Rs. 340," the brokerage has said.

The shares of Mahindra Lifespace Developers was last seen trading at Rs 294 on the NSE.

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Investing in equities poses a risk of financial losses, especially as we are seeing volatile markets now. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article. The author does not own any shares in the stock of Mahindra Lifespace Developers Ltd.