Mahindra Lifespaces - Outperformance continues - HDFC Securities

Mahindra Lifespaces Developers Ltd (MLDL) ended FY22 with strong presales of 1.3msf (+20% YoY), valued at INR 10.3bn (+48% YoY, INR 2.5bn estimate). The IC&IC segment also saw strong performance, with 110acres leased (+2x YoY) for INR 3bn(+2.3x YoY). The input cost inflation is mitigated by (1) value engineering, (2) procurement renegotiations, and (3) 1.5-2% average price hike every quarter across the company's portfolio. Key FY22 highlight was GDV addition of INR 38bn and MLDL expects to add a similar GDV in FY23 (vs INR 25bn guidance annually). Overall, in FY23, INR 3-4bn is expected in land payment, including new land acquisition. The company has INR 45bn worth of GDV prospect pipeline, including outright purchase, society redevelopment, and stressed assets. Given the tailwinds in industrial business, upcycle in residential business, a robust balance sheet, trustworthy brand image, and a robust business development pipeline, we remain constructive on MLDL and maintain a BUY rating, with an unchanged NAV-based TP of INR 473/sh.

- Q4FY22 highlights: Revenue: INR 1.6bn (~2x beat). EBITDA came in at INR (357)mn (INR (371)mn/(388)mn Q4FY21/Q3FY22, vs INR (241)mn est.). There was an exceptional fair value gain of INR 968mn, owing to partial reversal of impairment loss provision in Gurgaon project, which is seeing better traction and pricing (impairment loss of INR 2.4bn in Q4FY20). RPAT came in at INR 1.36bn. APAT came in at INR (81)mn (+70%/-132% YoY/QoQ, INR 59mn profit estimate).

- Presales momentum healthy, traction building up in IC&IC: MLDL recorded presales of INR 3.3bn (-5.2%/+31% YoY/QoQ), with volume at 0.4msf (-25%/+22% YoY/QoQ). 90% of FY22 sales were sustenance ones as two launches - Bengaluru and Gurgaon - moved to Q1FY23. During the quarter, new launches were at 0.96msf (0.76/0.1msf in Q4FY21/Q3FY22). Launches from Kandivali, Pune, and Dahisar land are expected in FY23, while the Ghodbunder project is expected to hit the market in H1FY24. Within IC&IC, the company leased 25acres for INR 705mn, taking the FY22 leasing value to INR3bn. This was mainly on the back of MWC Jaipur. While Chennai has started seeing traction, Ahmedabad could take a couple of more quarters to pick up.

- Robust prospect pipeline: MLDL has INR 45bn of prospect GDV pipeline, with plans to add society redevelopment projects in Mumbai of at least INR 5bn ticket size. It is also building a network with ARCs and banks for acquiring their stressed assets. During the quarter, it acquired 1.7msf of land from M&M, with GDV potential of INR 24bn, taking the total FY22 addition to INR 38bn, which is well above the annual target of INR 20-25bn.

Shares of Mahindra Lifespace Developers Limited was last trading in BSE at Rs. 378.65 as compared to the previous close of Rs. 369.80. The total number of shares traded during the day was 50124 in over 2388 trades.

The stock hit an intraday high of Rs. 389.55 and intraday low of 369.10. The net turnover during the day was Rs. 19163294.00.

Source : Equity Bulls

Keywords

MahindraLifespaceDevelopers INE813A01018 Q4FY22 ResultUpdate HDFCSecurities