Shares of Mahindra Lifespace Developers rallied 9.5 per cent to hit a fresh all-time high at Rs 587.75 on the BSE in Wednesday's intra-day trades on future growth optimism. The stock price of realty player from the Mahindra Group surpassed its previous high of Rs 550.75 recorded in September 2022.
At 10:30 AM, the stock had pared some gains but was still up 5 per cent at Rs 564 on trades of around 97,000 shares as against the two-week average volume of around 20,000-odd shares. Meanwhile, the S&P BSE Sensex was up 0.5 per cent at 65,400.
In its latest report dated August 26, 2023; Knight Frank India, a leading real estate consultancy in the country, in association of NAREDCO has projected that India’s real estate sector is expected to expand to $5.8 trillion by 2047. This estimated real estate output value will contribute 15.5 per cent to the total economic output in 2047 from an existing share of 7.3 per cent.
The report projections PE investments in Indian real estate to reach $5.6 billion, reflecting a YoY growth of 5.3 per cent in 2023.
"With India's GDP expected to reach $36.4 trillion by 2047, the private equity investments within the Indian real estate sector are projected to surge to $54.3 billion by 2047, signifying a CAGR of 9.5 per cent spanning 2023 to 2047.", the release stated.
Providing perspective on REITs, Knight Frank shared that the combined portfolio of Indian REITs encompasses 84.9 mn sq ft, with 75.9 mn sq ft dedicated to office assets and 9 mn sq ft to retail assets. Additionally, there is ongoing construction of approximately 21.3 mn sq ft within the REITs sector, projected to reach completion within 1-2 years.
Meanwhile, the stock has witnessed a phenomenal rally on the bourses so far in FY24. It has zoomed 67 per cent as against 11 per cent gain on the BSE benchmark. For August alone, the stock was up 9 per cent, while the Sensex was down 1.7 per cent so far.
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On the earnings front, Mahindra Lifespace had reported a consolidated net loss of Rs 4.27 crore for Q1FY24 as against a net profit of Rs 75.70 crore in Q1FY23. Total income was up 6.2 per cent YoY at Rs 110.05 crore from Rs 117.34 crore.
Brokerage firm ICICI Direct has a 'Buy' rating on the stock with a target price of Rs 650 per share. In its research report it said, Mahindra Lifespace Developers strong parentage, management's focus on expanding its overall scale of operation and a comfortable balance sheet, were their key strengths.
"The key highlight of Q1FY24 was ambitious business growth by the new CEO. The new CEO Amit Sinha (erstwhile Mahindra Group strategy President) has outlined ambitious business growth of ~5x over the next 5 years from ~Rs 2,268 crore of resi and IC business sales to Rs 8,000 - 1,000 crore by FY28." ICICI Direct said in its report.