On track to achieve FY27 pre-sales guidance
About the stock: Mahindra Lifespace Developers, identified as a Growth Gem by Mahindra Group, has ~54 million square feet (msf) of residential projects across seven cities and 5,000+ acres of integrated cities / industrial clusters (IC& IC) business
• It eyes residential pre-sales of ~₹ 9500 crore by FY30, at 28% CAGR over FY25- FY30.
• Its IC&IC business is expected to generate revenues of ₹ 5000-6000 crore and PAT of ₹ 1500 crore (company’s share) over long term.
Q2FY27 performance: Mahindra Lifespace Developers reported healthy residential pre-sales of ₹ 1063 crore (up 41% YoY, 15% QoQ) and IC&IC sales of ₹ 72 crore (down 27% YoY, +76% QoQ) for Q2FY27. Resi-presales driven by launch of Beacon Hill in MMR and Citadel Phase 3, in Pune. Additionally, sustenance sales contributed 41% from Blossom, Vista, Rainforest, Marina 64 and Ivy Lush. Consolidated revenues stood at ₹ 32.4 crore for Q2FY27 as against ₹ 17.6 crore/ ₹ 962 crore in Q2FY26/ Q1FY27. Consequently, it reported EBITDA loss of ₹ 55 crore vs EBITDA Profit (loss) of (₹53)/ ₹ 94.5 crore in Q2FY26/Q1FY27. Company has significant other income of ₹ 72 crore, consequently consolidated PAT stood at ₹ 16.34 crore, down 66% YoY. Company secured business worth ₹ 1500/₹ 7100 crore during Q2FY27/H1FY27 (₹1700 /₹ 5200 crore in Q2FY26/H1FY26). Collections stood at ₹ 625 crore (₹ 517 crore Q2FY26) net debt to equity ratio at 0.28x.
Investment Rationale:
• FY27 pre-sales guidance retained on strong launch pipeline: The company retained its pre-sales guidance and launch guidance of ₹ 4500-5000 and ₹10,000 crore for FY27. It plans to launch Mahalunge, Pune (RERA received, ph I out of ₹ 3500 crore GDV), Navrat, Bengaluru (ph I out of ₹ 2100 crore) and Saibaba, Borivali (ph I out of ₹ 1800 crore GDV) and WestEra, Santacruz (₹ 550 crore) during H2FY27E. Sustenance sales from already launched projects viz. Rainforest ph I (Mulund), Blossom (Bengaluru), Citadel ph II (Pune), BeaconHill (South Mumbai) and Marina64 (Malad) is expected to contribute to FY27 pre-sales.
• New business development momentum to continue: The company added ₹ 7100 crore GDV during H1FY27. For FY27, it targets to add projects of ₹ 10,000-₹20,000 crore (on higher end) GDV across MMR/Pune/Bangalore in the ratio 60/20/20. Total GDV currently stands at ₹ 50,400 crore providing it multi-year pre-sales visibility. Based on strong business development over trailing two years and expecting the momentum to continue going ahead, it reiterated its long-term guidance of achieving ₹ 10,000 crore pre- sales (₹ 9500 crore residential, ₹ 500 crore IC&IC business) for FY30.
Rating and Target Price:
• We retain our BUY rating with unchanged SOTP based Target Price of ₹ 450/- (assigning nil premium to NAV).
