At Current Price Of Rs 482, It's Trading At A P/E Multiple Of 17 Times
MUMBAI-BASED realty developer Mahindra Lifespaces Developer (MLD) has gained 16% in the past one month, as its rental portfolio increases. The stock has managed to put up a good show despite the overall market gaining just about 5% in the same period. It touched its 52-week high of Rs 543.4 on April 8, '10 and closed at Rs 482. The stock also witnessed an unusually high trading volume. Foreign institutional investors have been bullish on the stock, as their shareholding in the stock in the March quarter has gone up against domestic institutional investors that have reduced their exposure slightly, compared to the December quarter.
The company's performance on bourses over a long tenure has been improving consistently. For instance, in the past three months, the stock gave 28% returns, and over a six-month period, it has been an outperformer, with its stock price doubling in value whereas the Sensex was flat during that period. On an annual basis also, the stock outperformed the Sensex as well as the ET Real Estate Index that gained 67% and 82% each, respectively.
The company's net sales almost doubled in the quarter ended December 31, 2009 at Rs 109 crore, compared to Rs 56 crore in the same quarter last year. Its net profit, for the same period, registered a 150% jump at Rs 27.9 crore, compared to Rs 11 crore. The company expects to maintain this growth momentum in coming quarters. Mahindra Lifespaces builds residential homes and commercial property under the brand 'Mahindra Lifespaces' and its integrated business cities under 'Mahindra world cities'. The company has completed about 5.8-million sq ft of development and currently has close to 8-m sq feet at various stages of launch or under construction. This is spread across Mumbai, Pune, Nashik, NCR, Chennai and Nagpur.
The company operates in the mid-, and high-end residential segment. It recently launched its mass housing project in Gurgaon costing Rs 25-40 lakh. Unlike other players, the company is debt-light with Rs 390-crore debt on its subsidiaries' books. Cash on the book is Rs 170 crore. Pre-sales and internal accruals would be used to complete under-construction projects.
The company currently has two SEZs in Chennai and Jaipur, both of which are seeing a strong traction in the recent past. At an annualised EPS of Rs 27.38 and the current market price of Rs 482, it is trading at a price to earnings multiple of 17 times. The company is well poised to benefit from the buoyancy in the real estate market, as it has priced its product correctly.
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hi
This is Kalidas from sulekha.com,
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Looking forward to your reply.
Kalidas
KalidasN@sulekha.net
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