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Upcoming launches to support FY27 presales In-line presales performance; we maintain 27% CAGR in FY26-28E

Mahindra Lifespaces (MLDL) reported bookings of INR10.6b (+41% YoY) in 2QFY27, in line with our estimate. This was driven by new launches at Beaconhill in MMR (INR2.8b; 26% share) and Citadel in Pune (INR2.0b; 19%). Further, Mahindra Vista in MMR was another major contributor, generating INR2.1b in sales (20% share). In 1HFY27, 41% of the overall bookings came from sustenance sales. Project Lakewoods (Phases F&G) in Chennai, launched in 2QFY27, and the recently launched Mahalunge P-1 in Pune are expected to meaningfully contribute to presales from 3QFY27. Three more projects are expected to be launched in FY27, and the company has reiterated its FY27 presales guidance of INR45-50b. We maintain our presales CAGR estimate of 27% to reach ~INR54.6b during FY26-28.

Strong business development strengthens launch pipeline

MLDL continued to strengthen its business development (BD) pipeline, with the addition of two society redevelopment projects in MMR (Chembur and Borivali) with a combined GDV of INR15b. With this, it added three projects in 1H with a combined GDV of INR71b, taking its residential GDV pipeline to ~INR504b, which provides comfortable launch visibility over the medium term. The company targets additions of INR100-200b in FY27 to further strengthen its growth visibility over the coming years.

Lukewarm performance in IC&IC business, but likely to pick up

Despite area sales increasing by 118% YoY to 36.9 acres, revenue from the IC&IC business declined 27% YoY to INR722m as a major portion of the land sold (~34 acres) was legacy outside-boundary land (OBL) at Mahindra World City Chennai, which commands lower realizations than land within the industrial park. The company has a healthy pipeline of unsold inventory of ~1,509 acres for the future, which should aid the IC&IC revenue in the coming years. This business is estimated to add INR50-60b of revenue to MLDL, with PAT potential of ~INR15b (MLDL’s share)

Cash flows remain steady

Collections improved by 10% YoY to INR6.3b and this is expected to improve in the coming quarters with progress in project execution. As of 1HFY27, collections were up 6% YoY at INR11.5b, which translated into OCF of INR3.4b. The company incurred an INR2.3b outlay for land payments during 2QFY27. Overall, we expect a 29% CAGR in collections to INR35b during FY26-28E. It remains a net cash company, with a net cash-to-equity ratio of 0.28x.

Financial performance

In 1QFY27, MLDL’s revenue increased 85% YoY to INR324m. EBITDA loss stood at INR550m. Other income rose 326% YoY to INR716m, driven by INR250m in provision reversals and a one-time INR269m gain from divesting Ample Parks investments. PAT declined by 66% YoY to INR855m.

Valuation and view

We value the residential business on a DCF basis, with a WACC of ~12.3%, translating into INR78b. We reiterate our BUY rating on the stock with a TP of INR470, indicating a 34% potential upside

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