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Strong Sales, New Launches are Key

Est. Vs. Actual for Q3FY25: Revenue – BEAT; EBITDA – BEAT ; PAT – BEAT

Changes in Estimates post Q3FY25

FY25E/FY26E: Revenue: 0%/1%; EBITDA: 0%/3%; PAT: 0%/2%

Recommendation Rationale

* Strong sales performance: MICL has recorded strong pre-sales numbers of Rs 608 Cr in Q3FY25, marking a 191% increase QoQ and a 415% increase YoY. The company’s pre-sales numbers have exceeded estimates by almost double, driven primarily by projects in Ghatkopar and Tardeo. Pre-sales for 9MFY25 stood at Rs 1,509 Cr, compared to Rs 353 Cr in 9MFY24, highlighting its ability to move inventory efficiently. MICL has surpassed its pre-sales guidance and has already doubled its FY24 pre-sales. Strong sales momentum is further supported by a surge in collections, with Q3FY25 collections at Rs 304 Cr and 9MFY25 collections at Rs 974 Cr. The company achieved a sales volume of 1.4 Lc sqft in Q3FY25, growing to 4.6 Lc sqft in 9MFY25, compared to 1.4 Lc sqft in 9MFY24.

* Project Portfolio and Launches: The company completed 1.4 Lc sq ft of carpet area sales in this quarter and delivered ‘Aaradhya Evoq’ at Juhu within 2.5 years of launch. MICL’s upcoming launch pipeline looks promising. The company has launched two new projects: Vile Parle (JadePark) with a topline of ~Rs 1,200 Cr and Aaradhya Parkwood with a topline of ~Rs 400 Cr. Other upcoming projects include Malabar Hills, Pali Hill, and BKC Kalanagar, which are expected to contribute a topline of Rs 4,000 Cr to Rs 4,500 Cr. The company will continue focusing on an asset-light development portfolio, with JV and DM projects in the upcoming pipeline. MICL had guided for a 30%-35% growth in pre-sales and has already exceeded its guidance as of 9MFY25.

* Acquisition & Launching Year: MICL, like most real estate companies, follows an acquisition-launch-realization cycle. The previous year focused on acquisitions, with the company aggressively acquiring projects across the MMR region. The upcoming quarters are expected to witness launches from these acquisitions, which will be realised in the subsequent financial year. As a result, operational performance may appear lagging, but the company remains on track with substantial collections and presales. With robust sales performance, MICL also anticipates margin expansion by FY26, driven primarily by the realisation of asset-light projects undertaken in FY25, leading to PAT margin improvement.

Sector Outlook: Positive

Company Outlook & Guidance: We remain positive on the company’s long-term prospects.

Current Valuation: DCF-based valuation

Current TP: Rs 260/share (Earlier TP: Rs 230 /share).

Recommendation: With a 34% upside from the CMP, we maintain our long-term BUY rating on the stock.

Financial Performance: The company reported revenue of Rs 242 Cr, a 5% rise QoQ, and an EBITDA of Rs 107 Cr, reflecting a 4% YoY growth. The reported PAT stood at Rs 84 Cr, marking a 1% YoY growth. Pre-sales stood at Rs 608 Cr, a 415% YoY jump. Collections also surged, with Q3FY25 collections at Rs 304 Cr. This marks the highest-ever 9M pre-sales in the company's history. The strong sales were primarily driven by projects in Ghatkopar and Tardeo.

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