For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

HDFC Securities Is Bullish On This Small Cap Mahindra Stock, Suggests Buy For 31% Gains

|

HDFC Securities is bullish on Mahindra Lifespaces Developers Limited (Mahindra Lifespaces). The brokerage has estimated a target price of Rs 521 apiece. Taking the estimated target price and the Current Market Price of the stock into consideration, the stock has a strong return of 31% in 12 months. Mahindra Lifespaces reported the highest-ever quarterly presales of Rs 6bn, with a volume of 0.65msf on the back of robust response to new launches that contributed 75% to presales. The IC&IC segment also saw a strong performance, with 42 acres leased in MWC Jaipur for Rs 1.2bn.

 

Stock Outlook & Returns

Stock Outlook & Returns

Mahindra Lifespaces Developers Limited stock closed on Friday at Rs 400.20 apiece after a dip of 2.12%. As of now, the share is trading below Rs 576.4 below the 52-week high. The stocks hit the 52-week high on July 05, 2022, at Rs 457.60 apiece. The 52 week low of the stock is Rs 218.50 apiece recorded on December 27, 2021.


The shares have witnessed a fall on 5.28% last week, and 2.45% in the last 1 month, respectively. In the last 1 year, the stock gave a positive return of 59.23%. The stock gave a multibagger return of 223.66% in 3 years and 183.66% in 5 years, respectively.

Q1FY23 highlights
 

Q1FY23 highlights

Revenue: Rs 946mn (-36/-42% YoY/QoQ, a miss of 45%). EBITDA came in at Rs (320)mn ((242)/(357)mn in Q1FY22/Q4FY22, vs Rs (135)mn estimate). RPAT came in at Rs 754mn (INR -139/+1.4bn Q1FY22/Q4FY22). There was an impairment reversal of Rs 338m. APAT, after reversing the impact of other income and exceptional gain came in at Rs 371mn (Rs (139)/(81)mn Q1FY22/Q4FY22) vs Rs 106mn est.

Highest-ever quarterly presales, strong traction in leasing

Highest-ever quarterly presales, strong traction in leasing

Mahindra Lifespaces recorded the highest-ever quarterly presales of Rs 6bn (+3x/+1.8x Q1FY22/Q4FY22), with volume at 0.65msf (+2.6x/+1.7x Q1FY22/Q4FY22). Presales were supported by new launches and robust sustenance sales. New project launches, viz. Mahindra Eden in Bengaluru and Luminaire in Gurgoan, contributed 75% to presales. Total new launches during the quarter including new phases were at 1.05msf (nil/0.96msf in Q1FY22/Q4FY22).

Mahindra Lifespaces expects to launch Kandivali and Pimpri projects during H2FY23, while the Dahisar and Ghodbunder projects are expected to hit the market in Q1FY24. Within IC&IC, the company leased 42.3acres for Rs 1.2bn in MWC Jaipur, with strong demand from EV and renewables industry. With the pipeline building in Chennai, it is expected to show significant change in trajectory in the next two quarters.

Robust BD pipeline

Robust BD pipeline

Mahindra Lifespaces has a BD pipeline of Rs 50bn, of which Rs 10bn may get finalised in Q2/Q2FY23. 20%/40%/40% of the BD is expected for Bengaluru/Mumbai/Pune. Mahindra Lifespaces' first society redevelopment project is expected in FY23. The balance 9MFY23 planned launches are pegged at Rs 12-15bn for FY23, of which INR 4.5-5bn of inventory is expected to come from Pimpri while Rs 5bn is expected from the Kandivali land. Residential net debt stood at Rs 10mn, with net D/E at 0.0x (vs Rs -1.5bn at -0.1x in Q4FY22) and industrial net debt stood at Rs 3.03bn, with net D/E at 0.34x (vs Rs 3.14bn at 0.35x in Q4FY22). Mahindra Lifespaces acquired 2.1msf of land in Pimpri, with GDV potential of Rs 17bn. It has an annual GDV addition target of Rs 20-25bn.

 Outperformance continues, suggests buy for target price of Rs 521 apiece

Outperformance continues, suggests buy for target price of Rs 521 apiece

According to the brokerage, Mahindra Lifespaces Developers Ltd (MLDL) reported the highest-ever quarterly presales of INR 6bn (+3x/+1.8x, YoY/QoQ), with volume of 0.65msf (+2.6x/+1.7x, YoY/QoQ) on the back of robust response to new launches that contributed 75% to presales. The IC&IC segment also saw strong performance, with 42acres leased in MWC Jaipur for Rs 1.2bn(+8x/+1.7x YoY/QoQ). The EV and renewable industry is driving the demand here. Mahindra Lifespaces has a strong BD pipeline of Rs 50bn, with Rs 10bn worth of projects in advanced stages of conclusion by Q2FY23. It is expecting the first society redevelopment project within this fiscal year. New launches for the remaining part of the year are expected at Rs 12-15bn, with Rs 5bn each from Kandivali and Pimpri lands. In Q1FY23, Rs 2.4bn was paid for land acquisition, despite which the residential segment has net debt of Rs 10mn. Residual land payment stands at Rs 4bn.

"Given the tailwinds in industrial business, the upcycle in residential business, a robust balance sheet, trustworthy brand image, and a robust business development pipeline, we remain constructive on Mahindra Lifespaces and maintain a BUY rating, with an unchanged NAV-based Target Price of Rs 521/sh," the brokerage said.

Disclaimer

The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.

Story first published: Saturday, July 30, 2022, 17:59 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X