Shares of Mahindra Lifespace Developers, a real estate and infrastructure development company, soared nearly 45 percent in the past year.
The stock got off to a great start in 2022, rising 3.30%, 18.16%, and 33.47% in the first three months. It eventually kept up the momentum to reach an all-time high of ₹550.8 apiece on September 12.
The stock has since experienced some profit booking, and as a result, it is now down 33.14% to ₹367 from its all-time high. Even so, it is still up by 51.79% so far this year.
According to recent projections made by analysts at Motilal Oswal, the stock may still have a long way to go. In its latest report, the brokerage laid out that the company is well on track to achieve near-term targets.
On the back of steady progress in project additions over the last two years and timely launches, MLDL achieved the highest-ever pre-sales of ₹10 billion in FY22. Further, continued traction in maintenance sales and a strong response to recent launches in Bengaluru (Eden, Kanakapura) and Luminare, Gurugram enabled the company to cross ₹10 billion in bookings in 1HFY23, Motilal Oswal said.
While launch plans for a few key projects such as Kandivali and Dahisar got pushed out due to delays in approvals, the earlier-than-expected launch of Pimpri-II (Pune) along with the subsequent phase at its Bengaluru project (Eden) will help the company sustain its sales momentum, it added.
Against the initial timeline of 1HFY24, MLDL has launched the first phase at Pimpri-II in 3Q, along with the final phase at its Bengaluru project. Also, the second phase at Pimpri-I is also expected to be launched in fourth quarter, said the brokerage.
Overall, the brokerage stated that the company's sales visibility in 2HFY23 will remain strong, as MLDL currently has inventory worth ₹12 billion and will launch a 2 million-square-foot project with a value potential of ₹13 billion. In FY24, the company will launch 2.7m sq. ft of projects/phases (excluding Thane) with a GDV of ₹25 billion.
The management indicated that it has an active business development pipeline of ₹50 billion, which includes projects across the three markets, of which ₹20 billion is in advanced stages. The company expects to sign a couple of projects with a GDV of ₹15–20 billion in 2HFY23, resulting in a cumulative GDV addition of ₹30–40 billion for FY23, according to the brokerage.
Mahindra Lifespace Developers recently entered into a joint venture with Actis to establish a platform for developing industrial and logistics real estate facilities across India. The JV will enable faster land monetization for MLDL and create an annuity stream for the company, it says.
In light of all these growth drivers, Motilal Oswal has reiterated its “BUY” rating on the stock with a target price of ₹550 per share.
For the September quarter, the company posted a consolidated net loss of ₹7.7 crore on the back of higher expenses. It posted a net profit of ₹6.5 crore in the corresponding quarter of the last fiscal.
The total revenue from operations stood at ₹73.8 crore in the second quarter of this fiscal year as against ₹65.7 crore in a similar quarter of the previous year. The company's total expenses came in higher at ₹115 crore in Q2 FY23 compared to ₹54 crore in Q2 FY22, a growth of 112.96%.
An average of 07 analysts polled by MintGenie have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
