Mahindra Lifespace Developers Ltd (BOM:532313) Q3 2025 Earnings Call Highlights: Navigating ...

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Tue, Feb 4, 2025, 12:00 AM 5 min read

Total Consolidated Income (9 months FY25): INR 408.4 crores, up from INR 224.5 crores in the previous year.
Consolidated PAT (9 months FY25): Loss of INR 23.8 crores, compared to a profit of INR 26.8 crores in the previous year.
Net Operating Cash Flow (9 months FY25): INR 600 crores, up from INR 459 crores in the previous year.
Total Consolidated Income (Q3 FY25): INR 185.8 crores, compared to INR 88.8 crores in Q3 FY24.
Consolidated PAT (Q3 FY25): Loss of INR 22.5 crores, compared to a profit of INR 50 crores in Q3 FY24.
Gross Debt: INR 1,500 crores.
Cash Balance: INR 600 crores.
Net Debt: INR 920 crores.
Cost of Debt: 8.9% as of December '24.
Net Debt to Equity Ratio: 0.5 on a fully consolidated basis.
Presales (9 months FY25): INR 1,749 crores, reflecting 41% growth from INR 1,243 crores in the previous year.
GDV Addition (9 months FY25): INR 14,000 crores, with an additional INR 1,000 crores from a recent transaction in Bangalore.

Warning! GuruFocus has detected 8 Warning Signs with BOM:532313.

Release Date: February 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Mahindra Lifespace Developers Ltd (BOM:532313) reported a 41% growth in presales for the nine-month period of FY25, reaching INR1,749 crores compared to INR1,243 crores in the same period last year.
The company has successfully completed a GDV addition of INR15,000 crores in the first ten months of FY25, including a significant joint development project in Bhandup.
The industrial and commercial (IC) business showed strong performance with leasing of 47.3 acres, generating INR209 crores in revenue, with Mahindra World City, Jaipur leading the way.
Mahindra Lifespace Developers Ltd (BOM:532313) has a healthy pipeline of projects, including major launches planned for Q4 FY25, such as Vista Phase 2 in Kandivali and Zen 2 in Bangalore.
The company maintains a strong balance sheet with a net debt-to-equity ratio of 0.5, and plans to keep it below 0.6, ensuring financial stability and flexibility for future growth.

Negative Points

The consolidated PAT for the nine-month period of FY25 showed a loss of INR23.8 crores, compared to a profit of INR26.8 crores in the same period last year, due to delays in obtaining occupancy certificates (OCs).
Quarter three presales were muted at INR334 crores, down from INR443 crores in Q3 FY24, attributed to approval delays and market conditions.
The affordable housing segment has seen a decline, dropping from 64%-65% of the market to 59%, impacting overall market dynamics.
Approval delays, particularly in Mumbai, have affected project launches, with national and state elections contributing to the slowdown.
The company's debt has increased to INR920 crores, with a gross debt of INR1,500 crores, raising concerns about future funding needs and potential capital raises.

Q & A Highlights

Q: What are the potential launches for the full year FY26? A: We are gearing up for FY26 with several key projects. Navy, our first redevelopment project, is close to launch. Alembic in Whitefield, with a GDV of INR1,800 crores, is awaiting approval. Citadel Phase 3 in Pune and Saibaba Nagar in Borivali are also in the pipeline. We are targeting a launch for Bhandup in Q4 of the next financial year.

Q: What EBITDA do you target for your projects? A: We focus on project IRRs rather than EBITDA. We target 20% plus IRRs, with a goal to deliver 18% to our shareholders. This is based on the right cost, pricing, and velocity assumptions.

Q: Can you provide the GDV potential for Q4 launches? A: For Q4, Vista Phase 2 has a GDV of INR1,200 to INR1,400 crores. IvyLush in Pune is around INR700 to INR750 crores. Malgudi-2 in Bengaluru is close to INR250 crores, and Citadel Tower I in Pune is around INR150 to INR175 crores. Project Pink in Jaipur is another INR200 crores, pending approvals.

Q: What is the status of the Thane and Santacruz projects? A: For Thane, we are in the second phase of approval, making it into an R zone. We expect clarity in the next two to three months. WestEra in Santacruz is facing delays due to amalgamation issues between societies, which we are working to resolve.

Q: How do you plan to fund the construction cost for the Bhandup project? A: We are in a healthy position with internal accruals and room for debt expansion. We aim to keep our debt-to-equity ratio below 0.6. We are also exploring public and private market options for funding.

Q: What are your plans for business development and execution? A: We have a GDV of INR30,000 crores, with an aspiration of INR45,000 crores. Our focus will shift to execution, accelerating the journey from land to launch and ensuring efficient project delivery.

Q: What are the expected OC projects for FY26? A: We expect OCs for Luminare in Gurgaon, Alcove towers C, D, and E, Mahindra Eden in Bangalore, Nestalgia towers, Happinest in Chennai, and potentially Pink plots if launched this financial year.

Q: What are your debt level targets for the next one to two years? A: We aim to keep our net debt-to-equity ratio below 0.6. We have healthy operational cash flows and plan to supplement them with other funding sources to maintain this target.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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