Initiating Coverage on Mahindra Lifespaces - HDFC Securities
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Mr. Parikshit D Kandpal, Institutional Research, HDFC Securities
Mahindra Lifespaces Developers Ltd (MLDL) is perceived to have missed the real estate cycle despite being an early starter. There is no point delving into what has gone wrong; instead we take a fresh look at what can transpire over the next few years. What has changed? Aggression: top management is a mix of Lodha (CEO, CMO, and CSO), Tata Housing (CLO) and Sobha (CPO). Financial strength: it has the lowest borrowing with ~20% lower cost than peers. Business Development (BD) pipeline: guidance of Rs 5bn/annum Capex on land with Rs 20-25bn pre-sales potential. Brand: invokes trust, transparency and corporate governance. Own land bank: captive land parcels and access to group s land bank. MLDL is on the path to multiyear rerating. We initiate with a BUY recommendation and Mar-22 SOTP of Rs 773/sh.