Marathon Nextgen Q1 Results Review - Potential Fundraise Through QIP To Drive Further Growth: DRChoksey

DRChoksey Research Report

Marathon Nextgen Realty Ltd. reported mixed results in Q1 FY25, with an improvement in top-line but a decline in profitability. The company remains optimistic about its upcoming launches in Monte South, NeoPark, Nexzone, and Neo Valley. These strategically positioned projects, with their appealing offerings, are expected to drive significant sales and profitability in the coming years.

The management, as highlighted in Q4 FY24, has worked on reducing the net debt of the company and is constantly working towards the same, leading to a potential decline in interest burden going forward.

We increase our FY26E Ebitda to Rs 2,936 (previously: Rs 2,657) and raise our enterprise value/Ebitda to 13.5 times (previously: 11.5 times), reflecting our continued optimism regarding the company’s upcoming projects, its robust and diverse pipeline, and significant interest from potential buyers, all of which are anticipated to drive top-line growth.

We raise our target price to Rs 632 (previously: Rs 450). However, since our last update on Marathon, the stock has surged 56.8%, limiting the scope of potential upside. Consequently, we downgrade our rating on the shares of Marathon Nextgen Realty to "Accumulate" from "Buy“.

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