Mahindra Lifespace Developers - Sales Surge On New Launches ::Edelweiss

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Mahindra Lifespace Developers’ (MLIFE) reported higher-than-expected Q3FY15 revenues, EBITDA and PAT led by robust bookings in Jaipur SEZ and earlier-than-expected revenue recognition in Happinest, Avadi. Operations were robust in Q3FY15 with highest-ever sales bookings of INR3.1bn (INR0.9bn in last quarter), led by several launches across Alibaug, Boisar, Hyderabad and NCR and a marketing push (involving brokers, international marketing and subvention schemes) by the company. While we expect sales bookings to further rise in FY16E to INR11.8bn (INR3.9bn in FY14 and INR6.7bn in FY15E), we highlight the relatively weak pipeline of forthcoming projects and that project additions will be key. With limited upside from current levels, we maintain HOLD with NAV/TP of INR561/share (INR546/share earlier). Any positive development for SEZs in the upcoming budget could pose upside risk to our valuations.

Quarterly beat on Jaipur SEZ sales

MLIFE reported higher-than-expected revenues, EBITDA and PAT led by robust bookings of 34 acres for INR680mn in the Jaipur SEZ versus just 18 acres in H1FY15 and Happinest Avadi hitting the revenue recognition threshold earlier than expected. Revenues and EBITDA margins at INR2.4bn and 28% beat our INR1.5bn and 24% estimate, respectively, led by Jaipur beat. The company’s net debt is largely stable at INR11.4bn and net debt to equity stands at 0.77x.

Sales bookings surge on launches

MLIFE reported its highest-ever quarterly sales bookings during Q3FY15 at INR3.1bn (INR0.9bn last quarter), led by launches of Serenes, Alibaug; Happinest, Boisar; Ashvita V, Hyderabad and Luminare I, NCR. Sales were robust and largely in line with our estimates. We expect FY15 sales to stand at INR6.7bn versus INR3.9bn in FY14. Additionally, we expect sales bookings to rise to INR11.8bn in FY16, led by further launches (Andheri, Bengaluru and subsequent phases of existing projects).

LINK
https://www.edelweiss.in/research/Mahindra-Lifespace-Developers--Sales-Surge-On-New-Launches;-Result-Update-Q3FY15/28182.html