Mahindra Lifespace - Growth Gem, To Focus On Scaling Up Business Development: ICICI Securities

ICICI Securities Report

We attended Mahindra Group’s Analyst Day held on June 14, 2024, wherein Mahindra Lifespace Developers Ltd. was identified as one of the group’s growth gems. The company reiterated its long-term vision of achieving annual sales bookings and leasing of Rs 80-100 billion by FY28 versus Rs 27 billion achieved in FY24. This hinges on company’s ability to add annual gross development value of Rs 60-80 billion (Rs 44 billion of GDV additions in FY24) which will entail an estimated investment of Rs 70 billion of which 50% is likely to be funded through internal accruals and the balance through platform tie-ups and debt.

We expect the company’s residential bookings to scale up further to Rs 28.4 billion in FY25E and Rs 35.5 billion in FY26E. We retain our Hold rating on the stock with an unchanged target price of Rs 649/share.

Key upside risk: Higher price growth in residential segment.

Key downside risk: Rise in land and construction costs.

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