Buy Mahindra Lifespace Developers Ltd for the Target Rs.500 by Emkay Global Financial Services Ltd
Mahindra Lifespace Developers (MAHLIFE) continues to see steady progress in its business development and launches. In 2Q, two of its projects—BeaconHill in Mahalaxmi and Citadel in Pune—have commenced pre-sales. However, due to seasonality, we expect pre-sales momentum to gain traction only from 3Q onward. The company is gearing up for launch of its Mahalunge, Pune project with GDV of Rs35bn in 3Q, having recently received RERA. Also, MAHLIFE has three more projects—at Borivali, Bengaluru, and Mulund with aggregate GDV of Rs41bn—in its pipeline for 2HFY27. Hence, the company is on track to meet its pre-sales guidance of Rs45-50bn in FY27E. We maintain BUY on MAHLIFE and TP of Rs500, based on 8x EV/embedded EBITDA at a 26% premium to the NAV (the stock is trading at 12% discount to NAV).
Business development on a strong footing
MAHLIFE has significantly accelerated business development over the last few years, with addition of projects worth Rs360bn during FY25-26, across MMR, Pune, and Bengaluru. The company has given guidance for Rs100-200bn GDV of business development in FY27E. MAHLIFE has added Rs71bn GDV YTD: i) outright in Kandivali with GDV of Rs56bn, and ii) three redevelopment projects—two in Borivali and one in Chembur with total estimated GDV of Rs15bn. MAHLIFE has Rs377bn GDV in the pipeline, as of beginning2Q. This strong pipeline provides visibility on the company’s ambitious FY30 pre-sales target of Rs95-100bn
Thane site visit
We recently visited the ~60-acre Thane land parcel of MAHLIFE. The land parcel is in Gaimukh Gaon, Thane West and is in the vicinity of Godrej Emerald; it has an estimated development potential of ~6msf. The mixed-use project is predominantly residential and targeted for launch in 1QFY28, with IOD expected by 4QFY27. Current realizations in the micro-market are ~Rs17,000/sqft, while upcoming Metro Line 4 and the Thane–Borivali tunnel should improve connectivity.
Mahindra Rainforest
We also visited Mahindra Rainforest, one of MAHLIFE’s largest projects, with ~Rs120bn GDV and five (total GDV: ~Rs30bn) of 12 towers in Phase 1 already launched. The next phase is expected to launch next year, while construction has commenced, with excavation underway. Customer traction remains healthy, with ~400–500 monthly walkins and a shorter conversion cycle; 2BHKs (worth ~Rs20mn each) are seeing the strongest response and demand for higher-ticket ~Rs40mn units has also picked up. We expect Rainforest to contribute >Rs10bn in pre-sales in FY27E.
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