Mahindra Lifespaces : TP: INR480 Buy :: Motilal oswal,

Mahindra Lifespaces (MLIFE) reported 4QFY13 standalone results below our
estimate, while consolidated numbers surprised positively.
 MLIFE's standalone revenue for 4QFY13 stood at INR1b (-27% YoY, v/s est. of
INR981m), while EBITDA declined 46% YoY to INR172m (est. of INR227m).
EBITDA margin improved 2.1pp QoQ to 16.8%, but fell below our estimate
due to weaker progress in Splendor II . PAT declined 28% YoY to INR232m (est.
of INR290m), further impacted by lower other income, but offset by lower
effective tax rate as well.
 4QFY13 consolidated revenue stood at INR3.3b, +25% YoY, while PAT (pre
minority) was at INR925m, +166% YoY. FY13 consolidated revenue stood at
INR7.4b (+5% YoY, v/s est. of INR6.1b), EBITDA at INR2.4b (+26% YoY, v/s est. of
INR1.5b) and PAT at INR1.4b (+19% YoY, v/s est of INR929m).
 Sharp increase in consolidated revenue in 4QFY13 is attributable to (1)
multiple projects crossing 25% threshold: (a) three phases of Bloomdale
(Nagpur), (b) Iris 2/3 (Chennai) and (c) Ashvita (Hyderabad, in standalone
entity), and (2) uptick in new leasing at MWC Jaipur: leased out 73 acres
(~INR1b) in 4QFY13, of a total 75 acres in FY13.
 MLIFE sold 0.38msf (INR1.5b) in 4QFY13, a stable run-rate against (0.39msf)
INR1.5b in 3QFY13 and 0.2msf (INR0.5b) in 4QFY12. FY13 pre-sales stood at
1.1msf (INR4.4b) v/s our estimate of 1.3msf (INR4.8b) and FY12 sales of 1.2msf
(INR5.9b). 4QFY13 pre-sales were driven by (1) Ashvita (Hyderabad) - 0.21msf
and (2) MWC Chennai projects (Iris and Aqualily) 0.14msf. Incremental presales
have been weak in Aura (Gurgaon) and phase I/II of Bloomdale (Nagpur).
 It acquired five projects (~2msf, with guided revenue potential of INR10b) in
FY13, along with one more affordable housing project in Boisar, Mumbai
(0.55msf) in Apr-13. 4QFY13 acquisitions include (1) a premium project in
Andheri (0.37msf) and (2) Bangalore (0.67msf). Consolidated net debt
increased by INR3.2b QoQ to INR7.1b (net DER of 0.55x).
 The stock trades at 1x FY15E BV, 10.2x FY15E EPS and 27% discount to our
FY15E SOTP value of INR520/share. Maintain Buy with a target price of INR480.

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