Diet Report : Mahindra Lifespace Developers Ltd by Elara Capital
FY25: Scale-up evident; turnaround is key
The key highlight in FY25 for Mahindra Lifespace (MAHLIFE IN) was the action on business development (BD) – appended the project pipeline by ~INR 180bn of gross development value (GDV). This was aided by the land acquisition of ~37 acres at Bhandup amounting to a GDV of INR 124bn. MAHLIFE now boasts a project pipeline of ~INR 400bn supporting its ambitious FY30 presales guidance of INR 95bn (> 3x versus FY25 level).
Presales in Q4FY25 and FY25 came-in at INR 10.5bn and INR 28bn, respectively, flat YoY and up 20% YoY respectively. Revenue from the Integrated Cities/Industrial Clusters (IC & IC) revenues sustained its annual run-rate (~INR 5bn in FY25). Residential collections in FY25 increased +30% YoY, while construction outflow was down 4% YoY, implying that construction spends is likely back-ended. Overall, the glidepath to growth is optically visible but faster turnaround of projects with a diversified footprint in MMR will be key to establish MAHLIFE’s positioning in the premium segment and turning constructive on the stock. We retain Accumulate.
Residential pipeline – Significant boost in FY25: MAHLIFE closed > 50acres of land deals in FY25, amounting to a GDV of INR 180bn. The deals are distributed among six micro markets, with a chunky share (~70%) attributable to the Bhandup micro market where monetization is likely in the next 10-12 years as against management expectations of 8-9 years.
Overall, the residential pipeline now stands at ~INR 400bn. Key acquisitions during Q4 were: 1) entry in South Mumbai market at Mahalaxmi (GDV of ~INR 17bn), 2) cluster redevelopment at Andheri Lokhandwala offering a GDV of INR 21.5bn and 3) INR 10bn in North Bengaluru (near airport). The developer plans on launching INR 60-70bn of projects in FY26.
Leasing segment – Steady show: Integrated Cities/Industrial Clusters (IC & IC) segment is sustaining its annual run-rate and registering a leasing income of ~INR 5bn in FY25, up 5% YoY. This is aided by higher average realization of INR 58mn/acre, up 48% YoY
Retain Accumulate: We like MAHLIFE’s transition to the premium and mid-premium strategy in its focus markets of Mumbai Metropolitan Region, Pune and Bengaluru. This is supplemented by its strong group brand. Accelerated BD in fast-moving markets and the glide path to monetize sizeable, well-diversified captive landbank of ~1,700 acres (available for lease) are key to unlock value, in our view.
We currently have an Accumulate on MLIFE with an SoTP-TP of INR 585. We value the development business at 75% of GAV and the IC & IC business at 25%. Key downside risk includes slower and margin-dilutive business development activity.
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