Visit http://indiaer.blogspot.com/ for complete details Revenues and EBITDA in line, PAT ahead of estimates
Mahindra Lifespace Developers (MLIFE) reported standalone Q2FY11 revenues at
INR 890 mn, against our estimate of INR 824 mn. EBITDA, at INR 234 mn, was
in line with our estimate of INR 224 mn, with reported EBITDA margin of 26%
against our expectation of 27%. PAT, at INR 247 mn, was ahead of our estimate
of INR 184 mn, primarily due to higher other income arising from dividend
payment from MLIFE’s subsidiaries.
Robust sales momentum with ~INR 2.6 bn of fresh sales this quarter
MLIFE has achieved sales from residential units (including subsidiaries of ~INR
3.5 bn in H1FY11; ~0.9 bn in Q1FY11) versus ~INR 1.5 bn in H1FY10. This was
driven by sales in ongoing projects and new residential launches in Eminente
(final phase) at Goregaon, Mumbai, Aura (second phase) in Gurgaon and
Aqualily (first phase) at Mahindra World City (MWC) in Chennai.
0.38 msf added to land bank through 2 new acquisitions in Mumbai
MLIFE has increased its land bank by 0.38 msf during the quarter by adding two
new projects in Mumbai at Kandivali (0.15 msf) and Ghatkopar (0.23 msf). We
have factored in value accretion of ~INR 0.4 bn (INR 9/share) from these new
projects over FY12-15E.
Steady leasing activity at Chennai and Jaipur SEZs
MLIFE’s Chennai SEZ has added four new customers during H1FY11 (new
customers include Australia-based Tridon, and Japan-based NTN Corporation,
Alpha Packaging, and JSP Foams), taking total customers to 53, of which, 34 are
operational. The Jaipur SEZ has three operational customers (Infosys, Deutsche
Bank, and Eexcel) with ~2,500 employees, with another six customers (including
ICICI Bank) having initiated construction this quarter.
Outlook and valuations: Fairly valued; maintain ‘HOLD’
Our previous NAV estimate for MLIFE stood at INR 524/share. Post the
acquisition of new Mumbai projects and balance sheet adjustments, we increase
our NAV estimate for MLIFE to INR 536/share. At CMP of INR 475/share, the
stock is currently trading at 11% discount to NAV. We maintain our
‘HOLD/Sector Underperformer’ recommendation on the stock.
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