Small Cap Mahindra Group Stock Grew 165% In 3 Yrs, Gets Buy For Robust 43% Potential Upside

Brokerage firm HDFC Securities initiates coverage on Mahindra Group's Mahindra Lifespaces Developers Ltd (MLDL) with a "Buy". The brokerage assigns a target price of Rs 521 for the stock. Considering this estimated target price, the stock is likely to give a healthy return up to 43% if purchased at the current market price. This company is Mahindra Group's Small cap Real Estate sector company with a market capitalisation of Rs 5,6402.02 crore.

Stock Outlook & Returns on Investment

The share price of the stock closed at Rs 365/share, after a 4.95% gain as compared to its previous close. Its 52-week low is Rs 237.95/share recorded on 27 January 2022 and its 52-week high is Rs 550.75/share recorded on 12 September 2022, respectively.

The stock has given 0.75% in 1 week, and 0.37% in 1 month, respectively. However, it has fallen 10.42% in 3 months. In the past 1 year, it gave 36.5% positive return. The stock over the past 3 years gave a robust 165.13% positive return. In the past 5 years, it gave 106.74% positive returns. 

Entering a new growth orbit, Buy for a target price of Rs 521/share

Mahindra Lifespaces Developers Ltd (MLDL) has outperformed 1.5x on its annual business development (BD) guidance of INR 25bn (FY22/FY23 HSIE estimate). We expect serious outperformance on (1) presales guidance of INR 25bn (by FY25), (2) realisation (with new BD realisation at 1.5x historical realisation, (3) new BD with a larger ramp-up in Bengaluru and Pune, (4) tapping growth with plotted launches as a new product and (5) likely improvement in profitability with operating leverage playing on account of higher growth, near 90% economic interest in upcoming launches and change in launch mix towards better margins products. "In our MLDL IC note 'Fresh Ambition, Fresh Upside' dated 4 Feb 2021, we focused on the company's three-year journey to rerating, most of which is coming true, viz., (1) aggression; (2) monetisation of group land and development on own land; (3) third-party GDV addition; (4) pick-up in industrial sales; and (5) 3x presales vs the longterm INR 9bn average. We maintain BUY with NAV-based TP of INR 521/sh," the brokerage has 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 consult with certified experts before making any investment decision.