Motilal Oswal Stays 'Neutral' On Mahindra Lifespace — Here's Why

Mahindra Lifespace Developers has always been a conservative organization. However, the recent boost in business development activity indicates a steady change in strategy, with a clear focus on accelerating growth. Supporting this transition, the company is now in a net cash position and plans to maintain its net D/E comfortably below 0.5x in the long run.

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Motilal Oswal Report

Mahindra Lifespace Developers Ltd. posted strong booking growth and is well-positioned to improve this momentum, given the healthy project pipeline across its key markets.

We have incorporated the recent rights issue proceeds of Rs 15 billion and accordingly adjusted equity, debt, and cash components.

We value the Residential business on a DCF basis with a WACC of ~14%, translating into Rs 44 billion.

We reiterate our Neutral rating on the stock with a target price of Rs 345, implying a 2% downside.

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