Sharekhan Retains Buy Call On Mahindra Lifespace Developers with Price Target of Rs. 640
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Outlook of Mahindra Lifespace Developers
Mahindra Lifespace Developers Ltd (MLDL) develops commercial and residential complexes, real estate, and residential amenities. Through its subsidiary firms, it also works on various infrastructure projects, such as creating SEZs and industrial clusters.
The company’s market capitalization is Rs. 8,281 Crore, with a current market price of Rs. 536. The stock is on an uptrend in the larger time frame and is currently trading near its all-time highs.
Current Valuation and Company Outlook
According to the latest report of Sharekhan, “MLDL has been able to ramp up its sales booking while it has a strong launch pipeline of projects for the balance fiscal. On the other hand, it has also added new projects with further land deals in the pipeline. The company’s low gearing can be utilized to raise debt to fund land acquisitions. The company is expected to foray into society redevelopment during the current fiscal. 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 a revised PT of Rs. 640, factoring increased traction in IC&IC leasing and residential sales and assigning higher land value.”
Investment Theme of Sharekhan on Mahindra Lifespace Developers
“MLDL is scaling up its land acquisitions and approvals pipeline with a strong core management team across key functions. The company is gearing up to pre-sale over Rs. 2500 crore per annum in the residential division over the next two to three years. The company’s low gearing can lend support to aggressive land acquisitions. The company is witnessing strong demand for built-to-suit factories, warehouses, and data centers for its IC&IC business. It has benefits of China +1 apart from increasing the government’s focus on attracting manufacturing investment in the country led by Atma Nirbhar, production linked incentive schemes for its IC&IC vertical. Overall, the growth outlook is positive for the company as the IC&IC vertical is a cash cow and the scale-up of its residential business provides a strong uptick.”, says the report of Sharekhan.
Sharekhan Mahindra Lifespace Developers Buy Call: Key Risks
Below are the key risks mentioned in the latest report of Sharekhan,
• “Slowdown in macro-economic environment percolating to real estate sector slowdown.
• Delay in execution, inability to maintain sales, rising interest rates, rising commodity prices.”
