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Last Updated : Jan 31, 2019 12:48 PM IST | Source: Moneycontrol.com

Hold Mahindra Lifespace; target of Rs 430: ICICI Direct

ICICI Direct recommended hold rating on Mahindra Lifespace with a target price of Rs 430 in its research report dated January 30, 2019.

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ICICI Direct's research report on Mahindra Lifespace


Mahindra Lifespace Developers (MLD) recorded better sales volume growth at 12% YoY to 0.35 msf valued at Rs 215 crore Standalone net sales declined 16.1% YoY to Rs 121.4 crore but was better than our expectation of Rs 79.2 crore EBITDA margins contracted 405 bps YoY to 7.1%, lower than our estimate of 11.4% due to higher employee costs PAT grew 16.8% YoY to Rs 15.4 crore (better than our expectation of Rs 14.7 crore) largely led by higher-than-expected topline growth On a consolidated basis, the topline declined 26.0% YoY to Rs 137.4 crore while its bottomline de-grew 28.4% YoY to Rs 19.4 crore.


Outlook


We like MLD given its strong parentage, management’s focus on improving return ratios through strategic partnerships with IFC & HDFC Capital & comfortable balance sheet. Additionally, it is currently trading at attractive valuation of 0.9x FY20E P/BV. While there are hints on a ramp up in residential project portfolio, we would like to see more improvement & also track progress in industrial cluster business. Hence, we maintain our HOLD rating with a target price of Rs 430/share.


For all recommendations report, click here


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First Published on Jan 31, 2019 12:48 pm
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