Shares of Mahindra Lifespace Developers have turned multi-bagger just in the last 1 year. The stock has advanced 106 percent in this period as against a 3 percent rise in benchmark Nifty and a 12 percent rise in Nifty Realty.
So far in 2022, the stock has risen 76 percent as against a 9 percent decline in the benchmarks. The rise in the stock is on the back of a recovery in demand for the real estate sector.
"Residential real estate has shown a very promising comeback post the lull period experienced during COVID-19. There has been a structural change in housing demand induced by the pain experienced by many during the pandemic. The rising interest rate is unlikely to dampen the consumer sentiment and we expect the same to remain buoyant," Ashish Khandelia, Founder, Certus Capital and Earnnest.me told MintGenie.
Experts believe that the firm is well poised to grow further on the back of strong additions in land for residential projects. It also has a strong balance sheet and the strong ability to raise capital, they added.
According to domestic brokerage house Sharekhan, Mahindra Lifespace Developers is poised to scale up its sales and execution with a strong management team at the helm of having credible experience in the respective fields.
"Further, the company is expected to benefit from the government's relentless focus on affordable housing segments, rising affordability levels, favourable state government policies for real estate, and ample inorganic growth opportunities. The company's low gearing can be utilised to raise debt to fund land acquisitions. Hence, we retain our Buy rating on the stock with an unchanged price target of Rs. 340," the brokerage said in a note.
In the March quarter, Mahindra Lifespaces reported a phenomenal 166.72 percent YoY growth in total revenues at ₹155 crore. Meanwhile, on a sequential basis, the revenues surged 365 percent. Meanwhile, the firm reported a profit in Q4FY22 as against a loss in the same quarter last year. Its consolidated net came in at ₹136 crore versus a net loss of ₹27.24 crore in the year-ago period.
The firm said that it saw good traction across both its verticals project management and development as well as complexes operation in the March quarter.
"The success in deploying technology and innovative construction techniques to drive efficiencies; focus on sustainability and creating differentiated offerings, and its ability to build motivated teams and a high-performance organisation sets the company apart among its peers — and signals its inherent potential to move to a higher growth trajectory. Therefore, we remain optimistic about the company's outlook for 2022-23," the company said post its earnings.
Mahindra Lifespace Developers Limited is a real estate development company. The Company along with its subsidiary companies is engaged in the development of residential projects and large formats developments such as integrated cities and industrial clusters. Its segments include projects, project management, and the development and operation of commercial complexes. It has 29.9 million sq. ft. (msf) of completed, ongoing and forthcoming residential projects across six Indian cities.
The realty firm has 2.5-3 msf of planned project launches with a gross development value of around ₹2,000 crore by H1FY23. "The strong response received from the Kalyan 2 project (launched 700 apartments out of 1,500 in February) would add to its pre-sales pipeline from Q4FY2022. Projects in Dahisar, Kandivali, phases of projects in Pune, and new business developments in FY2023 would aid in maintaining a strong launch pipeline in FY2024," Sharekhan had said.
The firm has entered into a lucrative land deal admeasuring 9.24 acres at Kandivali with its parent M&M with favourable payment structure.
"The predominantly 1.7 msf saleable area residential project has potential revenue generation of ₹2,500 crore (conservatively) over the next 5-7 years. The first phase of 0.5 msf is expected to be launched in Q4FY2023 or Q1FY2024," Sharekhan noted.
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