Sharekhan Retains Buy On This Multibagger Midcap Mahindra Group Stock, Sees Robust 57% Gains

Sharekhan retains a "Buy" on the Mahindra Lifespace Developers Limited (MLDL) stock with an unchanged price target of Rs. 600, considering the strong growth potential in its residential and IC&IC business. MLDL is a small-cap Real Estate sector company of Mahindra Group.

The brokerage recently interacted with the management of MLDL. According to the brokerage, the interaction with the management indicates adherence of the timeline with respect to new project launches and new phases in existing projects in Q3FY2023. It remains on track for Q4FY2023 launches. It added, the company remain confident of achieving its pre-sales, collections and new business development targets for H2FY2023.

Stock Outlook & Returns over the years

Considering the given target price of MLDL, the stock is likely to give up to 57% returns on investments if the stock is purchased at the current market price. The stock of the MLDL on NSE last traded at Rs 383.80 per share on NSE, 2.12% up as compared to its previous close. 
The stock touched the 52-week high at Rs 550.75 on 12 September 2022, and the 52-week low at Rs 2,18.50 on 27 December 2021, respectively. It has a market capitalisation of Rs 49,410.98 crore. 
The stock in the past 1 week has given 5.35% positive returns. However, it fell 2.87% in the past 1 month and 23.88% in the past 3 months, respectively. Over the past 1 year, it gave 56.37% positive returns. The stock has given multibagger returns of 199.49% and 135.41% in 3 and 5 years, respectively. 

 

Launches remain on track with a healthy response for Q3FY2023

MLDL remained on track in terms of launches for Q3FY2023. The citadel phase 1 project at Pune having a saleable area of over 0.5msf and Pre-launched in mid-November received good response. Further, the sustenance sales are expected to remain healthy as it launched Mahindra Eden phase 2, Mahindra Happinest MWC Chennai and re-launched Happinest Kalyan 2 during the current quarter. 

 

Pre-sales and collections targets for H2 achievable

Apart from the launches in Q3FY2023, the company remains on schedule to launch plotted development in MWC Chennai and Mahindra Nestalgia phase 2 during Q4FY2023. Post crossing Rs. 1000 crore pre-sales and Rs. 550 crore collections during H1FY2023, it remains on track to maintain strong presales momentum during H2FY2023 owing to adherence to launch timelines and improving execution run-rate.

Actis JV - developing rental income

The company became a JV partner with Actis entities by forming an SPV, which will be developing 2msf of industrial and logistics real estate facilities starting with Jaipur and Chennai. The total investment in the business over the initial years, including debt, is estimated to be Rs. 2,200 crore.

Sharekhan Retain Buy with an unchanged PT of Rs. 600

MLDL has corrected by ~30% over little more than the trailing two months in line with a broader correction in realty index and continued operating losses reporting over trailing four quarters along with nil business development activities getting closed post April 2022. "The correction offers a strong buying opportunity as we expect it to remain on track in terms of pre-sales, collections and business development for FY2023. We expect revenue recognition to catch up as new projects undergo handover. The Development of Enterprise and Service Hubs (DESH) bill is expected to provide further traction to its IC&IC business. We retain a Buy on the stock with an unchanged PT of Rs. 600 considering the strong growth potential for its residential and IC&IC business," sharekhan has said. 

Key Risks - A weak macroeconomic environment leading to a lull in the industry growth trend. 

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. 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 making any investment decision.