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Mahindra Lifespaces - 1QFY2013 Result Update - Angel Broking
Posted On : 2012-07-27 23:25:41( TIMEZONE : IST )
Mahindra lifespaces (MLIFE) reported a strong set of numbers beating our expectations across the board. MLIFE's standalone revenues came in at 15.8%, above our expectations, at Rs.104cr for 1QFY2013. Standalone EBITDA increased by 84.8% yoy owing to significant margins expansion and coming in at Rs.32cr. PAT for the quarter came at Rs.29cr (71.5% yoy) beating our expectations of Rs.22cr. On a consolidated level, MLIFE reported a Revenue/EBITDA/PAT of Rs.121cr/Rs.35cr/Rs.19cr during the quarter, suggesting a loss for its subsidiaries at net level (profit at operating level), which is due to majority of the consolidated debt being tied to its subsidiaries thereby leading to interest cutting into operating profits. We recommend Buy on the stock.
Sales remain subdued, expect strong pick up in following quarters: MLIFE launched second phase of project Bloomdale (Nagpur) during the quarter. Sales figures were weak for the quarter with MLIFE selling 0.16mn sqft during the quarter from its projects Aqualily at Chennai and Bloomdale at Nagpur for a total consideration of Rs.52cr, implying a realization of ~Rs.3,256/sqft, which is lower than its historical realization of between Rs.4,000-5,000/sqft. However, we expect strong sales numbers along with improving realizations in the coming quarters, once MLIFE's new projects at Pune and Hyderabad and succeeding phases' of Iris court at Chennai are launched, which are currently awaiting approvals.
We remain positive on MLIFE given its diversified geographic exposure in terms of ongoing and forthcoming real estate projects. We expect strong sales numbers over the coming quarters coupled following new project launch in Pune and Hyderabad along with robust execution. The stock is currently trading at 1.1x and 1.0x on our FY2013E and FY2014E book value estimate compared to its 3 year average of 1.3x. We value MLIFE on an SOTP basis and slightly adjust our NAV to Rs.495/share, and apply a 20% discount to our SOTP value to arrive at a target price of Rs.396, suggesting a 20% upside from current levels. We maintain our Buy rating on the stock.
