This Mahindra Group Real Estate Stock Can Jump 40%, Feels HDFC Securities

Broking firm, HDFC Securities has a "buy" call on the stock of Mahindra Lifespace Developers with a price target of Rs 521 on the stock.

Reasons to buy the Mahindra Lifespace Developers stock

According to HDFC Securities, the upcoming CEO laid out its top three priorities: (1) Deliver Rs 25bn/Rs 5 billion sales in residential/industrial by FY25 (may be a year ahead); (2) Given recent launch success, accelerating further launches; (3) across residential/industrials/others, looking at what can create maximum value and accelerating land acquisition efforts.

"Given the tailwinds in the industrial business, the upcycle in the residential business, a robust balance sheet, a trustworthy brand image, and a robust business development pipeline, we remain constructive on Mahindra Lifespace Developers and maintain a BUY rating, with NAV-based target price of Rs 521 per share,"HDFC Securities has said in its report.

Higher gross development value base will support multiyear presales

According to HDFC Securities, on its FY23E outstanding gross development value (Rs 85.4 billion), Mahindra Lifepsace Developers has enough visibility for a comfortable multi-year presales growth (FY23-25 presales CAGR of 22.5%).

"We estimate that Mahindra Lifespace Developers on average will have enough outstanding GDV to support presales for 4 years. We expect it to add Rs 35 billion of gross development value annually in the near term. For FY23, it is already on the path to cross Rs 35 billion of GDV addition, with Rs 32 billion added in FY23TD. As of Q3FY23, it has Rs 55 billion of BD pipeline, with significant conversion expected in the next two quarters. It expects to add INR 30-40bn of GDV annually for the next few years," HDFC Securities has stated in its report.

The stock of Mahindra Lifespace Developers was last seen trading at Rs 370 on the National Stock Exchange.

Disclaimer

The stock have 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.