Checkout Budget Highlights 2023HDFC Securities' research report on Mahindra Lifespaces
Mahindra Lifespaces Developers Ltd (MLDL) announced the appointment of MD & CEO, Mr. Amit Kumar Sinha, after Arvind Subramanian resigned from his post as MD & CEO to pursue personal interests. As communicated by Mahindra group CEO & MD Dr. Anish Shah, the new CEO will have the freedom towards capital allocation (with input from the board). Capital will not be a constraint for MLDL as M&M and financial partners believe MLDL is a high-growth business with an expected RoE between 15-18% for the group. In terms of intent, the group does not see their real estate business as a marginal player in the existing market and expects to go deeper in the MMR, Pune and Bengaluru markets. As a result, the group expects to outperform some of its promoter-driven peers. The upcoming CEO laid out its top three priorities: (1) Deliver INR 25bn/INR 5bn sales in residential/industrial by FY25 (may be a year ahead); (2) Given recent launch success, accelerating further launches; (3) across residential/industrials/others, looking at what can create maximum value and accelerating land acquisition efforts.
Outlook
Given the tailwinds in the industrial business, the upcycle in the residential business, a robust balance sheet, a trustworthy brand image, and a robust business development pipeline, we remain constructive on MLDL and maintain a BUY rating, with NAV-based TP of INR 521/sh.
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