ICICIdirect MahindraLifespace Coverage PDF

Initiating Coverage
January 11, 2013
Mahindra Lifespace Developers (GESCOR)
Rating Matrix
Rating
Buy
Target
| 505
Target Period
12-15 months
Potential Upside
28%
| 394
Quality player at an attractive valuation
YoY Growth (%) (consolidated)

(YoY Growth)
Net Sales
EBITDA
Net Profit
EPS (Rs)
FY12
14.6
8.5
10.1
10.1
FY13E
4.4
5.9
(11.5)
(11.5)
FY14E
24.9
34.7
11.8
11.8
FY15E
24.7
38.7
57.6
57.6
FY14E
13.7
17.5
8.0
1.2
8.9
12.1
FY15E
8.7
11.1
5.6
1.1
12.7
16.3
Valuation Summary (consolidated)

FY12
13.5
17.3
11.2
1.4
10.3
9.5
P/E
Target P/E
EV / EBITDA
P/BV
RoNW
RoCE
FY13E
15.3
19.6
10.9
1.3
8.5
9.1
Stock Data
Bloomberg/Reuters Code
Sensex
Average volumes
Market Cap (| crore)
52 week H/L
MLIFE IN / MALD.NS
19,663.6
44,960.0
1,633.7
435 / 250
Equity Capital (| crore)

Promoter's Stake (%)
FII Holding (%)
DII Holding (%)
40.8
51.1
26.6
5.2
Comparative return matrix (%)

Return %
Mahindra Lifespace De
DLF
Oberoi Realty
Sobha Developers
1M
(2.8)
5.3
(3.3)
5.6
3M
0.3
9.7
9.5
2.8
6M
21.0
8.9
19.5
17.6
12M
60.9
26.5
32.1
87.2
Residential portfolio New launches to drive sales volume

MLDL holds a total land bank of 22.2 mn sq ft as on Q2FY13 (including
14.1 mn sq ft in Chennai through its subsidiaries- (MITL & MRDL). Out of
this, ongoing projects contribute 4.0 mn sq ft, majority of which has been
sold. Going ahead, we anticipate forthcoming projects of 6.1 mn sq ft
would pick up its sales volume from 1.2 mn sq ft in FY12 to 2.1 mn sq ft in
FY15E. Overall, the residential portfolio contributes 70.2% to our
valuation and 68.7% to our consolidated revenues estimates in FY15.
SEZ well positioned portfolio in every stage of SEZ

Being the first private player in Chennai SEZ development of 1550 acres,
MLDL is progressing very well on Jaipur SEZ development and
acquisition of North Chennai integrated development (acquired ~500
acres of land out of total 750 acres). We also like MLDLs positioning of its
SEZ portfolio. With Chennai SEZ in the maturity & monetisation stage,
Jaipur in expansion stage and North Chennai in early stage, MLDL has
balanced its future growth and financial leverage very well.
Management track record & better leverage provides us comfort

We also like MLDL due to its strong parental advantage with exposure
across different vertical and its comfortable leverage. While it currently
sits on a net cash of | 86.6 crore at standalone level, its net debt to equity
on consolidated basis stands at 0.5x, which is better than its peers.
At 0.6x its NAV, valuations are attractive
Price movement
6,300
480
5,550
400
4,800
320
4,050
240
3,300
160
2,550
1,800
Jan-12
Mahindra Lifespace Developers (MLDL) is one of the leading real estate

developers with a presence in SEZ and residential development. Given
the strong residential portfolio contributing 70.2% to our valuation, well
positioned SEZ portfolio balancing the growth and leverage, strong
parental advantage and better financial position, we initiate coverage on
MLDL with a BUY recommendation with a target price of | 505 (0.7x
FY14E potential NAV).
80
Apr-12
Jul-12
Price (R.H.S)
Oct-12
Jan-13
Nifty (L.H.S)
Analysts name
Deepak Purswani, CFA
deepak.purswani@icicisecurities.com
Bhupendra Tiwary
bhupendra.tiwary@icicisecurities.com
ICICI Securities Ltd | Retail Equity Research
At the CMP, the stock is trading at 0.6x its FY14E potential NAV and 1.2x
FY14E P/BV. Considering the quality of management and comfortable
leverage position, we believe current valuations are attractive. We are
initiating coverage on MLDL with a BUY recommendation with a target
price of | 505 (0.7x FY14E potential NAV).
Exhibit 1: Financial metrics (consolidated)
(Year-end March)
Net Sales (| crore)
EBITDA (| crore)
Net Profit (| crore)
EPS (|)
P/E (x)
Price / Book (x)
EV/EBITDA (x)
RoCE (%)
RoE (%)
Source: Company, ICICIdirect.com Research
FY11
611.9
176.4
108.2
26.5
14.9
1.5
11.0
9.9
10.2
FY12
701.3
191.3
119.1
29.2
13.5
1.4
11.2
9.5
10.3
FY13E
732.4
202.7
105.3
25.8
15.3
1.3
10.9
9.1
8.5
FY14E
914.4
273.1
117.7
28.8
13.7
1.2
8.0
12.1
8.9
FY15E
1,140.5
378.8
185.6
45.4
8.7
1.1
5.6
16.3
12.7
Company background
Shareholding pattern (Q2FY13)

Shareholder
Holding (%)
Promoter
51.1
FII
26.6
DII
Mahindra Lifespace Developers (MLDL) is a leading real estate developer

with a presence in SEZ & DTA development and the residential segment.
Apart from 12.2 million (mn) square feet (sq ft) of land bank (including
forthcoming) and ongoing projects of 4.0 million sq ft, MLDL has
successfully set up the Chennai SEZ aggregating 1550 acres. MIDLs
Jaipur SEZ aggregating ~3000 acres is also progressing very well. In the
residential space, MLDL has so far completed 7.4 mn sq ft of
development across Mumbai (3.1 mn sq ft), NCR (~2 mn sq ft), Pune
(~1.6 mn sq ft), Chennai and Bengaluru. The company also has
forthcoming projects aggregating ~6.1 mn sq ft, which MLDL is looking to
launch over the next couple of quarters. The majority of the remaining
land bank (12.1 mn sq ft) is in Chennai (10.5 mn sq ft), a part of residential
development in MWC Chennai.
5.2
Others
17.2
FII & DII holding trend (%)

30.0
25.6
25.6
26.6
25.7
25.0
20.0
15.0
10.0
5.9
5.2
5.9
One of the differentiating factors for MLDL is its presence in SEZ

development. Its Chennai SEZ totalling ~1550 acres was the first SEZ
developed by a private developer. MLDLs Jaipur SEZ aggregating ~3000
acres is also progressing very well. Additionally, the company is also
planning its second integrated business city in north Chennai over 750
acres where land acquisition for ~500 acres has been completed so far.
5.8
5.0
0.0
Q3FY12
Q4F Y12
F II
Q1F Y13
DII
Q2FY13
Exhibit 2: Timeline of MLDL

Company name changed from Gesco
Corporation Ltd to Mahindra Gesco
Developers Ltd
Incorporated as a private
limited company
Mar, 1999
Aug, 1999
Mahindra Industrial Park Ltd,

rechristened as Mahindra World
City Developers Ltd
Converted into public limited company

under the name of Gesco Corporation Ltd
post merger with real estate division of GE
Shipping
Aug, 2008
Oct, 2007
FY06
Dec, 2002
Mahindra World City

Jaipur commences
operation
Mahindra World City

(Jaipur) Ltd became
subsidiary of the
company
Company name changed

to Mahindra Lifespace
Developers Limited
Exhibit 3: Company structure of MLDL

Mahindra & Mahindra Group
51%
Mahindra Life Space Developers
70%
74%
Mahindra Bebenco
Developers Ltd.
30%
74%
Mahindra World City
Jaipur
Mahindra Residential
Developers Ltd
26%
49%
B.E.Billimoria
RIICO
ARCH Capital
51%
Mahindra Integrated
Township Ltd.
6%
83%
26%
Mahindra World City

Developers
11%
TIDCO
Page 2
Investment Rationale
Residential portfolio robust project pipeline
MLDL holds total land bank of 22.2 mn sq ft as on Q2FY13. Out of these,
14.1 mn sq ft in Chennai is held through its subsidiaries (MITL & MRDL
subsidiaries) and rest is largely held under the MLDL umbrella.
Furthermore, the company currently has ongoing projects of 4.0 mn sq ft
(Chennai - 1.6 mn sq ft, Mumbai 0.8 mn sq ft & Nagpur- 0.4 mn sq ft). It
has Forthcoming projects of 6.1 mn sq ft (Chennai 1.9 mn sq ft, Pune
1.5 mn sq ft, Hyderabad 1.1 mn sq ft & Nagpur 1.1 mn sq ft), which
will hold key for the growth of residential portfolio, going ahead.
30%
70%
Residential
Exhibit 4: Residential project portfolio
Others
million sq ft
Chennai
Mumbai
Alibaug
Pune
NCR
Nagpur
Hyderabad
Nasik
Bangalore
Total
Residential portfolio to contribute 70% to our target price
Company
MITL & MRDL
MLDL
MLDL
MLDL
MLDL
MBDL
MLDL
MLDL
MLDL
Ongoing
1.6
0.8
0.2
1.0
0.4
Forthcoming
1.9
0.3
0.2
1.5
Land bank
10.5
0.7
Total
14.0
1.7
0.2
2.0
1.0
1.5
1.1
0.6
22.2
0.3
1.1
1.1
0.6
4.0
6.1
12.1
Source: Companys Quarterly investor presentations, ICICIdirect.com Research
MLDL- Sales volume muted in H1FY13; new launches provide visibility in FY15E
In the standalone property portfolio, MLDL has ongoing projects of 2.4
mn sq ft. Out of which, already 80% area is sold. Given lesser area
available for sale in H1FY13, MLDL sales have been muted in H1FY13.
Going ahead, MLDL is expecting to launch 3.5 mn sq ft in the coming
quarters. Out of these, the company has already launched a phase in
Hyderabad (total 1.1 mn sq ft) in December 2012. Furthermore, MLDL
also has MoUs of about 4.5 mn sq ft of residential land under title due
diligence. This would enable the company to add much needed land for
future growth.
MLDL also has MoUs of about 4.5 mn sq ft of residential

land under title due diligence. This would enable the
company to add much needed land for future growth
Exhibit 5: MLDL Ongoing project portfolio
Location
Mumbai
Nagpur*
NCR
Pune
Total Ongoing Project
Project Name
Eminente Aspen
Eminente Angelica
Splendour -II
GE Garden #
Bloomdale IA
Bloomdale IB
Aura- II
Aura- III
Aura- IV
Aura- V
Antheia - Ph I
Total Development
launched
mn sq ft units
0.2
68
0.2
68
0.4
230
0.1
60
0.2
210
0.2
98
0.2
166
0.2
110
0.3
141
0.3
110
0.2
200
2.4
Last base Price

Launch Date (|/sq ft)
Aug-09
10,350
Sep-10
9,650
Feb-10
8,200
Jul-11
10,747
Nov-11
3,000
May-12
2,950
Dec-10
3,175
Apr-11
4,100
Dec-11
4,375
Dec-11
4,375
Sep-12
4,500
% units sold
100%
100%
100%
7%
68%
42%
100%
100%
94%
86%
22%
% completion
83%
75%
76%
21%
16%
63%
54%
40%
37%
Estimated
completion date
Dec-12
Sep-13
Mar-13
Dec-14
Apr-13
Mar-14
Sep-13
Dec-14
Jun-15
Jun-15
Mar-16

* under MBDL (in JV)which we have considered under standalone
Page 3
Exhibit 6: MLDL Forthcoming projects
Exhibit 7: MLDL landbank projects
Location
Mumbai
Project Name
GE Gardens, Kanjurmarg
Alibaug
Antheia subsequent phases
Pune
Sopan Baug
Avadi affordable housing
Chennai
Hyderabad Kukatapally
Nagpur
Bloomdale new phases
Total
Mn sq ft
0.3
0.2
1.4
0.1
0.7
1.1
1.1
4.9
Source: Company, ICICIdirect.com, Research
Location
Nasik
Project Name
Satpur Project
Pune
Pimpri Commercial Project

Thane Project
0.3
0.6
Kandivli Project
0.1
1.6
Mumbai
Total
Mn sq ft
0.6
Source: Company, ICICIdirect.com, Research
Chennai Residential development riding on SEZ development

The residential development in Chennai is done through MITL & MRDL.
These subsidiaries are carved out subsidiaries of MWC undertaking
residential development of the integrated development at MWC.
Currently, these companies have ongoing project portfolio of 1.5 mn sq ft
and are expected to launch 1.2 mn sq ft in Chennai over the next 3-4
quarters.
MITL and MRDL have ongoing project portfolio of 1.5 mn
sq ft and are expected to launch 1.2 mn sq ft in Chennai
over the next 3-4 quarters.
Exhibit 8: Ongoing projects in Chennai

mn
Project Name sq ft units
Aqualily Villas C
0.1
40
Aqualily Villas D
0.1
37
Aqualily Apts A
0.1
80
Aqualily Apts B
0.3 178
Aqualily Apts C1
0.3 136
Iris Court Ph I
0.3 244
Iris Court Ph II
0.3 229
1.5
Location
Chennai
Total
Launch Date
Apr-11
Oct-11
Apr-10
Dec-10
Sep-12
Dec-10
Jan-11
Last base
price (|/sq
%
ft) % units sold completion
4,640
44%
35%
4,634
35%
30%
3,740
100%
37%
3,740
77%
20%
3,780
3%
0%
2,900
100%
48%
3,320
73%
9%
Estimated
completion
date
Sep-13
Mar-14
Sep-13
Sep-14
Oct-14
Sep-12
Jun-14
Exhibit 9: Forthcoming & Land bank in Chennai

12
10.5
in mn sq ft
9
6
3
0.5
0.3
0.4
MWC Chennai
Residential
Iris Court
Aquality
Forthcoming
MWC Chennai
Residential
Landbank
Page 4
We highlight that the sales volume and absorption trend of the Chennai
residential market has been buoyant in the recent past. Nonetheless, we
remain conservative in our sales volume estimates and factor in
absorption of the entire area over 10-12 years (till FY25).
Average Property prices
5.0
5.3
15
3.9
10
5
Sales volume
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Y-o-Y (RHS)
Source: Liases Foras, ICICIdirect.com Research
6.6 20
6.5
(%)
5.0
5.5
Jun-11
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Jun-11
0
Mar-11
2900
Dec-10
5
Sep-10
3250
Jun-10
10
5.5
Mar-11
3600
7.4
Dec-10
15
8.0
7.0
6.0
5.0
4.0 3.2
3.0
2.0
1.0
0.0
Sep-10
3950
20
(mn sq ft)
25
Exhibit 11: But absorption remains robust
(%)
4300
Jun-10
(|/sq feet)
Exhibit 10: Chennai property prices increase over last couple of years
Absorption (RHS)
Source: Liases Foras, ICICIdirect.com Research
Sales subdued now; expected to revive in FY15E with new launches

With a high percentage of a majority of ongoing projects (3 mn sq ft out
of 4 mn sq ft) already sold and given that a couple of projects had earlier
faced delays in clearances, we expect FY13 residential sales to be lower
at 0.9 mn sq ft. However, boosted by the forthcoming project pipeline of
6.1 mn sq ft, the remaining land bank of 12.1 mn sq ft and clearances
issues sorted out, we expect a bump up in residential sales volume in
FY14 and FY15.We expect residential sales of 1.5 mn sq feet and 2.1 mn
sq feet in FY14 and FY15 respectively.
Exhibit 12: Residential sales volume and value trend
Boosted by the forthcoming project pipeline of 6.1 mn sq ft

and remaining land bank of 12.1 mn sq ft, we expect a
bump up in residential sales volume in FY14 and FY15.
2.1
2.0
1.5
1.2
1.5
1.2
0.9
1.0
0.5
1.4
0.3
0.4
FY08
FY09
0.4
1200
1000
800
600
400
(| crore)
(million sq feet)
2.5
200
0
0.0
FY10
FY11
Area Sold
FY12 H1FY13 FY13E FY14E FY15E

Sales Value (RHS)
Hencerevenue recognition to see jump in FY15E only

,
As we highlighted above, given the slowing sales volume in FY13E-14E

and strong pipeline of forthcoming projects, which would be launched
over the next couple of quarters and reach the threshold in FY15E, we
anticipate the residential portfolio will see a pick-up in revenue
recognition in FY15E. Overall, we anticipate residential portfolio revenues
growing at 12.4% CAGR during FY12-15E despite the subdued revenues
recognition in FY13E. Nonetheless, overall the residential portfolio
contribution to overall consolidated revenues is expected to come down
to 68.7% in FY15E from 71.3% in FY13E.
Page 5
Exhibit 13: Revenues recognition & contribution to consolidated revenues

85
1200
81.7
1000
400
200
68
138
0
23
29
54
30 71.3
81
85
126
477
469
411
417
FY11
FY12
FY13E
FY14E
68.7
75
(%)
(| crore)
800
600
80
78.6
68.7
577
70
65
60
Standalone
MRDL
MITL
FY15E
Revenue contribution (RHS)
Mahindra World City early mover in SEZ play
26%
74%
Industrial Development
Others
Industrial Development to form 26% of target price
MLDL has positioned its SEZ portfolio well with the three
SEZs in different phases of development. While the
Chennai SEZ totalling ~1550 acres is in a mature and
monetisation stage (where the company is now reaping
the benefits of residential development), the Jaipur SEZ is
in the development phase while North Chennai is in the
initial phase
MLDL enjoys the early mover advantage in the SEZ business. MLDL is the
first private player that has developed Chennai SEZ totalling ~1550 acres
(saleable area - 1125 acres, industrial - 822 acres and residential &
commercial: 303 acres) Leveraging on this experience, MLDLs Jaipur
SEZ aggregating ~3000 acres (saleable area - ~2064 acres, industrial 1350 acres and residential & social area - 714 acres) is also progressing
very well. Additionally, the company is also planning its second integrated
business city in north Chennai over 750 acres where land acquisition for
~500 acres has been completed so far. We also like MLDL SEZ portfolio
given the fact it has exposure in every stage of SEZ. Hence, the cash
flows generated from mature & monetisation stage SEZ such as Chennai
will help it in development of North Chennai & Jaipur SEZ.
Additionally, MLDL has also entered into two MoUs with the Gujarat
Government at the Vibrant Gujarat summit. While the first MoU is for
the development of a ~3,000 acres integrated business city at the Dholera
Special Investment region, located in the proposed Delhi Mumbai
Industrial Corridor, the second MoU is for the development of an
industrial park of ~500 acres near Ahmedabad. We highlight that we have
not considered the above two planned SEZs into our valuation
considering that they are still at a nascent stage.
Exhibit 14: Phasing and positioning of various World Cities

1.2
Mahindra World City, North Chennai
1
0.8
0.6
0.4
Land acquisition
Regulatory clearance & approval process
0.2
Setting up of infrastructure
Development of industrial units and
getting anchor clients on board
Promotion of investment, export and
employment creation happens during this
phase
Monetisation of land parcel happens during

this phase
During this phase, development of
residential properties and commercial buildings
such as malls, hospitals is done
Page 6
Leasing income to improve through MWC & MWCJ

The north Chennai land would be the major kicker for
leasing income at MWC from FY15 onwards. For MWC
Jaipur, we expect improvement in leasing activity on the
back of development of industrial zones and planned DMIC
passing along Rajasthan which could attract further clients.
We expect revenues from MWC (includes North Chennai) and MWC

Jaipur to expand from | 148.2 crore in FY12 to | 355.5 crore in FY15
largely led by leasing activity from Jaipur, & kicking in of lease income
from North Chennai. With only 8% of the leasable area left from MWC
Chennai, we expect the leasing activity at North Chennai to kick in from
FY15 onwards and support the lease income. For MWC Jaipur, we expect
improvement in leasing activity on the back of development of industrial
zones and planned DMIC passing along Rajasthan which could attract
further clients.
Exhibit 15: Leasing income to improve through MWC & MWCJ
Exhibit 16: World Cities to contribute ~ 31% revenues in FY15

35.0
FY15E
FY14E
30.0
(%)
FY13E
FY12
FY11
50.0
25.0
20.0
100.0
150.0
200.0
250.0
(| crore)
MWC- Chennai
300.0
350.0
15.0
FY11
MWC - Jaipur
FY12
FY13E
FY14E
FY15E
Leasing as a % of Total Revnues
Leveraging on MWC- North Chennai foray

Mahindra World City (MWC), Chennai is the first SEZ in the private sector
with MLDL being a pioneer in integrated business city development in
India. MWC, jointly promoted by MLDL and Tamil Nadu Industrial
Development Corporation Ltd (TIDL), has been operational for the last 11
years. It has three sector SEZs IT (services & manufacturing), apparel &
fashion accessories and auto ancillaries a domestic tariff area (DTA) for
businesses catering to the Indian market and a residential & social
infrastructure zone over the saleable area of ~1,134 acres.
The business zone in the project has 61 customers (40 of whom are
operational) and provides employment to ~29,000 people. The operation
of MWC has matured. With 90% of industrial land already leased and
leveraging on the success of the same, the company is planning to launch
another integrated development in Chennai. This project will be spread
across 750 acres, towards North Chennai, which is home to large
industries in the engineering and automobile sector. The company has so
far acquired 500 acres for the same while the remaining land acquisition is
under way.
Page 7
Exhibit 17: Break-up of land at MWC Chennai

Industrial
Acres
Sold/Leased (%)
850.0
90
of which
MWC Chennai has three sector specific special economic

zones (SEZs) IT (services and manufacturing), apparel
and fashion accessories and auto ancillaries a domestic
tariff area (DTA) for businesses catering to the Indian
market and a residential & social infrastructure zone over
the saleable area of ~1,134 acres
SEZ
442.0
IT
297.5
Auto Ancillary
93.5
Apparel & Fashion
51.0
DTA
408.0
Residential
241.0
100
Commercial
43.0
26
Saleable Area
1134.0
Exhibit 18: Clientele trend at MWC Chennai

70
60
57
50
44
40
60
61
49
38
30
20
10
0
FY08
The business zone in the project has 61 customers (40 of
whom are operational) and provides employment to
~29,000 people
FY09
FY10
FY11
FY12
H1FY13
Exhibit 19: Employment trend at MWC Chennai

35000
27000
(No.s people)
30000
25000
20000
20000
23000
12000
15000
10000
29000
7500
5000
0
FY08
FY09
FY10
FY11
FY12
H1FY13
Source: Companys Annual Reports, ICICIdirect.com Research
Page 8
Exhibit 20: Clientele at MWC Chennai

IT SEZ
Auto SEZ
Domestic Tariff Area
Domestic Tariff Area
Atos Origin*
Brakes India
Alpha Packaging
Milton Roy India
Capgemini India
Madras Engineering
American Axle
Musashi Paints
Electronic Recycling
Sundaram Brake Linings
Armstrong
Mecaplast India
Helios & Matheson*
Sundaram Clayton
B. Braun Medical
Netafim
Infosys Ltd
Sundaram Fasteners
BMW India
NTN Corporation
Mastek
Timken Engineering
CII
Parker Hannifin
MindTree*
UCAL Fuel Systems
DePuy Medical
Sakazaki Engraving
Federal Mogul
Sanwa Synergy
ShardaMotor Industries
Renault Nissan*
Tech Mahindra*
Apparel SEZ
Freight Systems
VIPL
AI Enterprises
Fujitec India
SMC Pneumatic
Wipro
Bengal Hangers
Galipoglu Hidromas
Tesa Tapes India
Capella Fashions
Guangdong Greatoo
Tridon Automotive
TTK Healthcare
Social
Intermode
Husky Injection Molding Systems
Duet Hotels
Leather Craft
Ingersoll Rand
JSP Hospitals
Linea Fashions
JCF Valves
Mahindra World School
Rico Group
JSP Foams
Amelio Day Care
Srinivasa Fashions
Kryolan Cosmetics
BP Petrol Station
Slam Apparel
Lincoln Electric Company
Canopy Commercial Complex
Timex Garments
Mahindra & Mahindra
MWC Jaipur Development stage - to bear fruits going ahead
MWC Jaipur is a 74:26 JV between MLDL and Rajasthan

State Industrial Development & Investment Corporation Ltd
(RIICO). It is being developed as a multi-product SEZ and
DTA across 3,000 acres
MWC Jaipur is a 74:26 JV between MLDL and Rajasthan State Industrial

Development & Investment Corporation Ltd (RIICO). It is being developed
as a multi-product SEZ and DTA across 3,000 acres, for which 2,809 acres
of land have been acquired as on Q2FY13. The project has five zones
namely IT/ITeS, handicraft, engineering & related industries, gems &
jewellery and the domestic tariff area. MWC Jaipur also plans to expand
the coverage of the project to include other segments such as apparel,
logistics and residential & social infrastructure. The company has so far
leased ~ 550 acres (i.e., 41% of industrial land). The business zone in the
project has 12 operational customers and provides employment to
~3,000 people.
MWC Jaipur has also allocated ~714 acres for the development of
residential and social infrastructure, which the company expects to
develop after the commissioning of a major portion of business zones.
We believe that post the maturity of business zones, residential
development would be the key value driver for MWC Jaipur, going
forward. Nevertheless, we highlight that we have not built in any value
from the same in our fair valuation.
In addition to the leasing of the above land, the IT/ITeS SEZ also includes
Evolve, which is a 1.4 mn sq ft multi-tenanted IT park spread over ~25
acres (currently ~0.4 mn sq ft operational).
Exhibit 21: Leasing status of Evolve
In addition to the leasing of the above land, the IT/ITeS SEZ

also includes Evolve, which is a 1.4 mn sq ft multi-tenanted
IT park spread over ~25 acres
Rentable Area (sq feet)
Area leased (sq feet)
A1
115316
115316
A2
115316
99884
B1
100025
30291
Building
Page 9
Exhibit 22: Location of MWC Jaipur
Located 262 km from Delhi, to the south west of Jaipur

Distances within Jaipur
- Airport 22 km
- Railway Station 21 km
- City Centre 21 km
In proximity to
- Proposed Outer Ring Road
- Proposed Delhi-Mumbai Industrial Corridor (DMIC)
Source: MWC Jaipur Brochure, ICICIdirect.com Research
Exhibit 23: Break-up of land at MWC Jaipur

Industrial
Acres
Leased (%)
1350.0
41
of which
SEZ
972.0
DTA
378.0
Residential
714.0
Saleable Area
2064.0
Exhibit 24: Clientele at MWC Jaipur

IT/ITeS SEZ
Handicrafts SEZ
Engineering & Related Industries SEZ
BOI Global Services*
GAD Industries
Dynamic Powertech
Gravita
EXL Service*
Jaipur Crafts
SystweakSoftware*
Kirat Crafts
India Agrovision
Genpact*
Laxmi Ideal Interiors
Knitpro International
Girnar Software
OrviDesign
Marsons Industries
Infosys BPO
Rajdhani Craft
Poly Medicure
Infosys Ltd.
RatanTextiles
QH Talbros
Isys Softech
Rediprint International
Tijaria International
Nagarro Sortware
Samurai Designs & Interiors
Veto Electricals
Nucleus Software
Seesham Handicraft House
Veto Polymers & Metals
Truworth KPO Services
Rama Handicrafts
DTA
Wipro
Art Age Furnishings
ICICI Bank
ConnexxionsIT Services
Rustic Furniture
State Bank of India
Tech Mahindra
Page 10
Rajasthan - Favourable location for export oriented industrial development

Rajasthan's location, with its proximity to the NCR industrial clusters and
ports of the western coast, make it an ideal location for export-oriented
industrial development on a large scale. Additionally, 40% of the
proposed Delhi-Mumbai freight corridor will pass through Rajasthan
throwing up enormous possibilities for development of industrial belts
such as SEZs along the corridor. Furthermore, the Rajasthan government
is doling out the following incentives/benefits for SEZ:
Land conversion at | 100 to developers in rural areas & 100%
exemption on stamp duty to developers and units in RIICO SEZ
50% exemption to units from electricity duty for seven years &
100% exemption from work contract tax to units and developers
for seven years
100% exemption from entry tax to units on capital goods brought
into local areas by the unit required for use as capital goods for
setting up industry in SEZ
100% exemption from VAT to units on sale or purchase by a
registered dealer for an industrial unit established in the SEZ
100% exemption from luxury tax for seven years & 50% exemption
from entertainment tax for seven years
Exhibit 25: Rajasthan enjoys benefit of DMIC presence
Source: dmic.co.in, ICICIdirect.com Research
Page 11
Land Acquisition Bill on the cards...MLDL to benefit on early mover advantage

The Cabinet recently cleared the new land acquisition bill, which will now
be presented in the Lok Sabha and Rajya Sabha. The key changes that the
bill seeks to introduce are:
Consent of 80% of owners mandatory for private projects and 70%
for public-private-partnership projects
Compensation has been set at 4x and 2x of the market value of the
land in rural and urban areas, respectively
Besides the above-mentioned compensation, a comprehensive
Rehabilitation and Resettlement package has also been proposed
for both land owners and livelihood losers. Apart from this, setting
up infrastructural amenities has also been proposed to be provided
in the resettlement area
With the implementation of the bill, to the extent it gets

more and more difficult and costly to add land; MWC
Jaipur could see better interest in terms of prices and
demand
Implementation of this bill will definitely hike the cost of land for
developers. However, we believe MLDL that has already acquired almost
its complete land requirement in Mahindra City, Jaipur will benefit in
terms of early mover advantage. Furthermore, with the implementation of
the bill, to the extent it gets more and more difficult to add land, MWC
Jaipur could see better interest in terms of price and demand.
Additionally, the company has already acquired ~ 500 acres out of 750
acres for MWC North Chennai, which implies it would not have to shell
out a higher price for the same.
Superior net debt to equity vis--vis peers

MLDL has a comfortable net debt to equity of 0.5x as on Q2FY13. We
expect it to come down to 0.3x in FY15 as we believe that free cash flow
generated from residential sales and SEZ sales would more than
compensate for the capex requirement.
We believe that a superior net debt to equity vis--vis

peers assures timely execution and provides significant
scope for growth, going ahead
At the parent level also, MLDL has a strong balance sheet and is currently
sitting on a net cash of | 86.6 crore at the standalone level (inclusive of
current investment of ~| 204.3 crore) as on Q2FY13. We believe that
superior net debt to equity vis--vis peers assures timely execution and
provides significant scope for growth, going ahead.
Exhibit 26: Comfortable debt equity position at consolidated level ensures timely execution
0.6
0.4
(x)
0.4
0.3
0.2
0.5
0.4
0.3
0.3
0.2
0.0
FY09
FY10
FY11
FY12
FY13E
FY14E
FY15E
Debt/Equity
Page 12
Exhibit 27: Peer analysis of leverage

2.4
2.0
1.6
0.5
0.4
0.3
0.3
0.2
0.6
0.6
0.7
0.8
1.8
-0.2
-0.3
-0.4
(0.4)
-0.2
-0.1
0.9
1.0
0.9
0.8
0.7
1.1
1.1
0.0
0.9
0.4
0.5
0.8
2.1
(x)
1.2
(0.8)
Godrej Properties
DLF
Oberoi Realty
FY09
FY10
FY11
Sobha Developers
FY12
Mahindra Lifespace
H1FY13
Source: Company, Bloomberg, ICICIdirect.com Research
Management track record across business verticals another reassurance

MLDL is promoted by the Mahindra Group, which has a diversified
presence in automobile, financial services, IT, travel & tourism, etc. The
group has had a presence for the last five decades and has exhibited a
strong track record of being among the top players across business
verticals. The strong management capabilities add to our reassurance that
execution of projects shall remain robust.
Page 13
Financials
Consolidated revenue to grow at 17.6% CAGR during FY12-15E
We expect MLDLs consolidated net sales to grow at 17.6% CAGR during
FY12-15E led by a ramp-up in residential sales (both standalone and other
subsidiaries) and robust growth in MWC Jaipur.
While sales growth for standalone residential properties will be moderate
at 7.2% CAGR during FY12-15E (major bump up to be seen only in FY15
with projects reaching the revenue threshold in that year), the robust
growth in other residential properties (MITL, MRDL, etc) would prop up
the consolidated revenue growth. Furthermore, the ramp up in MWC
Jaipur and initiation of north Chennai leasing would also contribute to the
topline at the consolidated level.
Exhibit 28: Consolidated revenue growth trend
1,140.5
1200
17.6% CAGR
1000
We expect revenues to grow at a CAGR of 17.6% in FY1215E from | 70.1.3 crore to | 1141 crore
(| crore)
800
611.9
701.3
732.4
FY12
FY13E
914.4
600
400
200
0
FY11
FY14E
FY15E
Exhibit 29: Break-up of consolidated revenues

1200
68
138
(| crore)
1000
85
800
600
400
0
23
41
68
29
54
90
58
477
469
30
81
132
126
173
76
112
411
417
FY13E
MWC - Jaipur
FY14E
MRDL MITL
217
138
577
200
FY11
Standalone
FY12
MWC - Chennai
FY15E
Others
Page 14
EBITDA to grow at 25.6% CAGR during FY12-15

The consolidated EBITDA of MLDL is expected to grow at a CAGR of
25.6% during FY12-15 on the back of strong revenue growth and an
improvement in margins. EBITDA margins are expected to improve from
27.3% in FY12 to 33.2% in FY15 on the back of an increasing share of
higher margin MWC revenues as well as improved margins from the
residential segment.
Exhibit 30: EBITDA growth trend
378.8
400
35
350
273.1
250
200
176.4
30
202.7
191.3
(%)
EBITDA margins are expected to improve from 27.3% in

FY12 to 33.2% in FY15 on the back of increasing share of
higher margin MWC revenues as well as improved margins
from residential segment
(| crore)
300
150
25
100
50
0
20
FY11
FY12
FY13E
EBITDA
FY14E
FY15E
Margin (RHS)
PAT growth of 15.9% CAGR in FY12-15

PAT is expected to grow at a CAGR of 15.9% in FY12-15E driven by
revenue growth. While profitability will be lower in FY13E and moderate
in FY14E, we expect PAT to grow to | 185.6 crore in FY15E driven by the
higher revenue bump up in FY15E.
Exhibit 31: PAT & PAT margin trend
200
185.6
180
160
PAT is expected to grow at a CAGR of 15.9% in FY12-15E

driven by revenue growth
(| crore)
140
120
108.2
119.1
105.3
117.7
100
80
60
40
20
0
FY11
FY12
FY13E
FY14E
FY15E
Page 15
Return ratios to bottom out by FY13

For FY13 we expect return ratios to decline given the muted bottomline
show. However, improvement in profitability from FY14 onwards will be a
kicker for the return ratios of MLDL to improve.
Exhibit 32: Return ratios to improve
18
16
16.3
(%)
14
The improvement in return ratios will mainly be seen in
FY14E onwards driven by a sharp bump up in earnings
12
10
8
10.2
9.9
10.3
12.1
9.1
9.5
12.7
8.9
8.5
6
FY11
FY12
FY13E
RoNW
FY14E
FY15E
RoCE
Page 16
Risk & concerns

Removal of MAT exemption may dent SEZ demand
The Union Budget of FY12 had removed the MAT exemption for
developers and units under SEZ, which was earlier allowed under Section
115JB (6) the Income-Tax Act. The Budget proposed to levy MAT of
18.5% on the book profits of SEZ developers and units. This was done in
an attempt to move towards the Direct Tax Code, proposed to be
implemented by FY14, which seeks to replace profit-based tax benefit
with investment-linked incentives along with gradual removal of other
existing incentives benefiting SEZ units. This move could have a bearing
on the demand for SEZ units as tax benefit was a key incentive for units
proposing to set up business there.
Removal of MAT exemption may have a bearing on
demand for SEZ units as tax benefit was a key incentive for
units proposing to set up business there
The government meanwhile has indicated that it would announce revised

norms for SEZs, which are losing favour due to removal of MAT
exemption. Media reports indicate the government is considering relaxing
the requirement for minimum land requirement as well as extending
benefits of exports scheme. We believe any positive move would be key
in reviving the interest in SEZ units.
Delay in standalone residential projects approval

Delays in getting project and land approvals for the standalone residential
projects have been a key dragger in terms of execution for MLDL in FY13.
The key projects on the anvil, which have seen delays, were the
Bloomdale project in Nagpur, 1.75 mn sq ft Pimpri residential project
(approved and launched in Q2FY13) and subsequent phases of Iris Court,
Chennai. Besides these, its 0.25 mn sq ft Kanjurmarg residential project is
also on hold. We believe that continued delays in such projects could be a
major risk to our real estate execution estimates.
Inability to replenish land bank

MLDL does not maintain a large land bank for its developmental plans.
Apart from a large land bank for residential projects in Chennai, it has
maintained a policy of acquiring land and developing it within a relatively
short duration of time. We believe that inability to replenish the land bank
for residential development could pose a risk to standalone business
growth.
However, we note that apart from the current land bank, MLDL also has
MoUs of about 4.5 mn sq ft of residential land under title due diligence,
which would enable it to add the much need land for future growth
Page 17
Valuation
We are initiating coverage on MLDL with a BUY

recommendation and a price target of |505 (0.7x FY14E
potential NAV)
At the CMP, the stock is trading at 0.6x its FY14E potential NAV and 1.2x
FY14E P/BV. Considering the quality of management and better leverage
position, we believe the current valuations are attractive. We are initiating
coverage on MLDL with a BUY recommendation with a target price of
| 505 (0.7x FY14E potential NAV). We have considered a discounting rate
of 15% for the SEZ and real estate business. To value the commercial
property such as Evolve IT Park and Canopy, we have used the cap rate of
11%. Based on these assumptions, our FY14E potential NAV for MLDL
work outs to | 708/share and we derive our target price at | 505/share
(0.7x FY14E potential NAV) as we have not incorporated the residential
development at Jaipur in our NAV; the success of which would largely
hinges upon the Jaipur SEZ. We have valued MLDL on the NAV
methodology as this methodology captures the true value from its long
term nature of the SEZ and real estate business.
Exhibit 33: Valuation

Project
Mn sq
ft/Acres
Chennai
MWC - Chennai & North Chennai
SEZ (in Acres)
NAV
Value
MLD (%)
623.7
Stake value
Value / share
518.5
127.0
NAV
Multiple
Target Valuation
Value
MLD (%)
579.4
Stake value
Value / share
482.0
118.0
Canopy
MITL
MRDL
Avadi
2300
0.1
11.9
1.46
0.72
150.3
11.5
314.8
127.7
19.4
83
83
96
49
100
124.8
9.5
302.2
62.6
19.4
30.6
2.3
74.0
15.3
4.8
1.0x
1.0x
0.9x
0.9x
1.0x
150.3
11.5
283.3
114.9
19.4
83
83
96
49
100
124.8
9.5
272.0
56.3
19.4
30.6
2.3
66.6
13.8
4.8
MWC Jaipur
MWC Jaipur SEZ (in Acres)
Evolve IT park - Operational
Evolve IT park - Development
Residential Area
3000
0.4
1.0
21.8
1249
408
107.3
18.3
715.7
74
74
74
100
1111
302.0
79.4
13.5
715.7
272.0
74.0
19.4
3.3
175.3
1.0x
1.0x
0.9x
0.0
532
408.2
107.3
16.4
0.0
74
74
74
100
394
302.0
79.4
12.2
0.0
96.4
74.0
19.4
3.0
0.0
Mumbai
Eminente Aspen Goregaon
Eminente Angelica Goregaon
Splendour -II Bhandup
GE Garden # Kanjurmarg
Thane
Kandivli
1.5
0.2
0.2
0.4
0.1
0.6
0.1
350.5
8.1
12.0
20.1
130.9
138.5
40.9
100
100
100
100
100
100
350.5
8.1
12.0
20.1
130.9
138.5
40.9
85.8
2.0
2.9
4.9
32.1
33.9
10.0
1.0x
1.0x
1.0x
1.0x
1.0x
1.0x
350.5
8.1
12.0
20.1
130.9
138.5
40.9
100
100
100
100
100
100
350.5
8.1
12.0
20.1
130.9
138.5
40.9
85.8
2.0
2.9
4.9
32.1
33.9
10.0
NCR- Aura
1.0
58.07
100
58.1
14.2
1.0x
58.1
100
58.1
14.2
Pune
2.0
164.9
100
164.9
40.4
1.0x
164.9
100
164.9
40.4
Hyderabad
1.1
211.1
100
211.1
51.7
0.8x
158.3
100
158.3
38.8
Nagpur
1.5
171.8
70
120.3
29.5
1.0x
171.8
70
120.3
29.5
Alibaug
0.2
152.5
100
152.5
37.3
1.0x
152.5
100
152.5
37.3
Nasik
0.6
119.4
100
119.4
29.2
0.8x
95.5
100
95.5
23.4
86.9
100
86.9
21.3
1.0x
86.9
100
86.9
21.3
2892.8
708.4
2062.7
505.1
FY14E Net Cash

Grand Total
3188.3
2349.9
Page 18
In our target valuation, we have not assigned any value to

residential development in the Jaipur SEZ as the success
of this would largely depend upon the Jaipur SEZ and
residential development is at least two to three years away
from here
Exhibit 34: Vertical wise NAV break-up
In terms of vertical wise break-up, residential contributes 78% to our NAV

valuation and 70% to our target price valuation followed by SEZ
contributing 15% to our NAV valuation and 21% to our target valuation.
The difference in vertical wise distribution is largely on account of Jaipur
Residential valuation. In our target valuation, we have not assigned any
value to the residential Jaipur SEZ as the success of this would largely
depend upon the Jaipur SEZ and residential development is at least two
to three years away from here.
Exhibit 35: Vertical wise target price break-up
IT Park
4%
IT Park
5%
Net Cash
4%
Net Cash
3%
Residential
78%
SEZ
15%
Exhibit 36: Area wise NAV break-up

NCR Pune
2% 6%
In terms of area wise break-up, Jaipur contributes 38% to our NAV

valuation while Chennai contributes 18%. In our target valuation, Chennai
accounts for 24% followed by Jaipur (19%) and Mumbai (17%).
Exhibit 37: Area wise target price break-up
Pune
NCR 8%
3%
Hyderabad
7%
Others
17%
Jaipur
38%
SEZ
21%
In our target valuation, Chennai accounts for 24% followed

by Jaipur (18%) and Mumbai (17%)
Mumbai
12%
Residential
70%
Chennai
18%
Hyderabad
8%
Mumbai
17%
Jaipur
19%
Others
22%
Chennai
23%
Page 19
MLDL is currently available at a discount to other leading real estate

development players. Considering the quality management and better
leverage position, we believe MLDLs discount to other leading players is
unwarranted.
Considering the quality management, & better leverage

position, we believe MLDL discount to other leading
players is unwarranted.
Exhibit 38: Peer valuation matrix

Mkt Cap
(| crore)
EPS
Price/Earnings(x)
RoE (%)
FY12
FY13E
FY14E
FY12
FY13E
FY14E
39204
9.6
9.6
11.3
21.2
23.9
20.4
6.8
6.2
Oberoi Realty
8891
14.1
15.9
29.0
19.2
17.1
9.3
12.4
Godrej Properties
4608
18.7
18.2
29.8
40.2
36.3
22.1
DLF
Price / Book (x)
FY12 FY13E FY14E
EV / EBITDA (x)
FY12
FY13E
FY14E
FY12
FY13E
FY14E
7.0
1.6
1.5
1.4
15.0
14.3
13.2
12.5
18.8
2.4
2.1
1.8
15.7
11.9
5.5
13.6
13.0
18.9
5.2
4.5
3.9
62.7
32.2
18.0
Sobha Developers
3785
21.0
23.0
32.2
18.4
16.8
12.0
10.3
10.4
13.2
1.9
1.7
1.6
10.6
9.2
6.5
Mahindra Lifespace
1634
29.2
25.8
28.8
13.5
15.3
13.7
10.3
8.5
8.9
1.4
1.3
1.2
11.2
7.0
5.5
Source: Bloomberg, Company, ICICIdirect.com Research
Exhibit 39: One year forward P/BV chart

The stock has traded at an average P/BV of 1.3x. Currently,
at one year forward P/BV of 1.2x, the price to book is still
lower than historical average
800
700
600
500
400
300
200
100
Price
P/BV 2.5
P/BV 2
P/BV 1.5
P/BV 1
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
Jan-09
Oct-08
Jul-08
Apr-08
P/BV 0.5
Source: Company, Reuters, ICICIdirect.com Research
Page 20
Key assumption & sensitivity analysis

In order to arrive at MLDLs NAV valuation of | 708/share and target price
of | 505/share, we have built up the key assumption. We discuss the key
assumption below and exhibit the sensitivity to our key assumption.
Exhibit 40 below gives details about our assumption for realisation
and construction cost for our base year i.e. FY13E. From FY14E
onwards, we have built up 5% escalation per annum for both
realisation and construction cost per annum
Exhibit 41 shows the sensitivity to our realisation and construction
cost escalation assumption of 5% per annum. According to our
analysis, every 1% change in realisation escalation impacts our
valuation ~6% and every 1% change in construction cost impacts
our valuation ~4%
To discount the future cash flows, we have considered the discount
rate of 15%
Exhibit 42 indicates that every 1% change in our discount rate
assumption impacts our valuation by ~2%
From FY14E onwards, we have built up the 5% escalation
per annum for both realisation and construction cost per
annum
Exhibit 40: Assumption for realisation & construction cost for FY13E
Realisation/psf
FY2013E
Construction cost/psf
MITL
MRDL
Avadi
3.0
1.3
3320
4147
2500
0.3
0.3
2100
2144
1800
MWC Jaipur
MWC Jaipur SEZ *
Evolve IT park - Operational**
Evolve IT park - Development**
Residential Area
1.3
30
30
4000
0.3
NA
2000
2500
8,200
10,747
8000
11000
3800
3000
3000
3000
NCR- Aura
4375
2000
Pune
4500
2500
Hyderabad
3200
1800
Nagpur
2979
1500
Alibaug
10000
3500
2500
1500
Chennai
MWC Chennai*
MWC North Chennai*
Mumbai
Splendour -II Bhandup
GE Garden # Kanjurmarg
Thane
Kandivli
Nasik

* on per acre basis
** indicates Lease rate p.m.
Page 21
Exhibit 41: Sensitivity to realisation & construction cost escalation per annum
Realisation escalation % p.a.
According to our analysis, every 1% change in

realisation escalation impacts our valuation ~6% and
every 1% change in construction cost impacts our
valuation ~4%
Construction cost
escalation % p.a.
505
3%
4%
5%
6%
7%
3%
480.6
509.0
539.0
570.6
603.9
4%
464.3
492.7
522.7
554.3
587.6
5%
446.8
475.2
505.1
536.7
570.0
6%
427.9
456.3
486.3
517.8
551.2
7%
407.6
436.0
466.0
497.6
530.9
Every 1% change in our discount rate assumption impacts

our valuation by ~2%
Exhibit 42: Sensitivity to discount rate

Discount rate
13.0%
14.0%
15.0%
16.0%
17.0%
Value /share (|)
505.1
505.1
505.1
505.1
505.1
Page 22
Tables and ratios (Standalone)

Exhibit 43: Profit & loss account (standalone)
((| Crore)
Net Sales
Other Income
Total Revenue
FY11
476.6
30.3
506.8
FY12
469.0
52.2
521.1
FY13E
411.1
68.0
479.1
FY14E
416.8
50.0
466.8
FY15E
577.0
55.0
632.0
Operating Expenditure
Employee Expenses
Administrative Expenses
Total Operating Expenditure
313.7
15.9
24.2
353.8
302.0
20.9
25.0
347.9
258.5
23.0
27.5
309.0
260.3
25.3
30.2
315.9
334.4
27.9
33.3
395.6
EBITDA
Interest
PBDT
Depreciation
PBT
Total Tax
PAT
122.7
1.2
151.9
2.5
149.4
46.3
103.0
121.0
3.0
170.2
2.7
167.6
47.4
120.2
102.2
10.8
159.4
3.2
156.2
48.4
107.8
101.0
18.0
133.0
3.5
129.5
42.7
86.8
181.4
21.6
214.8
3.8
211.1
69.7
141.4
25.2
29.4
26.4
21.3
34.6
EPS
Exhibit 44: Balance sheet (standalone)

(| Crore)
Equity Capital
ESOP
Reserve and Surplus
Total Shareholders funds
FY11
40.8
0.6
986.8
1,028.3
FY12
40.8
0.8
1,078.5
1,120.2
FY13E
40.8
0.8
1,161.2
1,202.9
FY14E
40.8
0.8
1,227.8
1,269.4
FY15E
40.8
0.8
1,336.3
1,378.0
100.0
170.0
180.0
180.0
180.0
0.9
(0.3)
(0.3)
(0.3)
(0.3)
1,129.2
1,289.8
1,382.5
1,449.1
1,557.6
48.3
16.4
31.9
362.1
168.7
182.0
333.0
204.8
34.8
923.3
152.9
35.3
735.1
47.7
18.6
29.1
448.6
233.6
88.3
463.5
127.3
97.6
1,010.3
156.6
41.5
812.2
52.7
21.8
30.9
388.6
397.5
78.8
405.5
173.9
78.8
1,134.6
135.2
36.4
963.0
57.7
25.2
32.5
388.6
396.9
79.9
411.1
234.0
79.9
1,202.0
137.0
36.9
1,028.1
62.7
29.0
33.7
388.6
380.9
110.7
569.1
204.8
110.7
1,376.1
189.7
51.0
1,135.3
1,129.2
1,289.8
1,382.5
1,449.1
1,557.6
Total Debt
Deferred Tax Liability
Total Liabilities
Total Gross Block
Less Total Accumulated Depreciation
Net Block
Other Investments
Inventory
Debtors
Loans and Advances
Cash
Other Current Assets
Total Current Assets
Creditors
Provisions
Net Current Assets
Total Assets
Page 23
Exhibit 45: Cash flow statement (standalone)

(| Crore)
Profit after Tax
Depreciation
Cash Flow before working capital changes
FY11
103.0
2.5
106.7
FY12
120.2
2.7
125.8
FY13E
107.8
3.2
121.7
FY14E
86.8
3.5
108.2
FY15E
141.4
3.8
166.8
Net Increase in Current Assets

Net Increase in Current Liabilities
Net cash flow from operating activities
(139.2)
22.6
(10.0)
(164.5)
9.9
(28.8)
(77.7)
(26.6)
17.5
(7.3)
2.4
103.4
(203.4)
66.8
30.2
(Purchase)/Sale of Fixed Assets

(Purchase)/Sale of Investments
Others
Net Cash flow from Investing Activities
(2.1)
47.4
(1.0)
44.4
0.2
(86.5)
(1.2)
(87.5)
(5.0)
60.0
55.0
(5.0)
(5.0)
(5.0)
(5.0)
Inc / (Dec) in Equity Capital

Inc / (Dec) in Loan Funds
Others
Net Cash flow from Financing Activities
0.0
100.0
(34.7)
65.3
70.0
(31.3)
38.7
10.0
(35.9)
(25.9)
(38.2)
(38.2)
(54.5)
(54.5)
Net Cash flow

Cash and Cash Equivalent at the beginning
Closing Cash/ Cash Equivalent
99.7
105.1
204.8
(77.6)
204.8
127.3
46.6
127.3
173.9
60.2
173.9
234.0
(29.3)
234.0
204.8
Exhibit 46: Ratio analysis (standalone)

FY11
FY12
FY13E
FY14E
FY15E
25.2
25.8
251.8
30.1
29.4
30.1
274.3
29.6
26.4
27.2
294.6
25.0
21.3
22.1
310.9
24.7
34.6
35.6
337.4
44.4
Operating Ratios
EBITDA / Total Operating Income
PAT / Total Operating Income
25.8
21.6
25.8
25.6
24.8
26.2
24.2
20.8
31.4
24.5
Return Ratios
RoE
RoCE
RoIC
10.0
10.7
13.0
10.7
9.2
10.2
9.0
7.2
8.2
6.8
6.7
8.0
10.3
11.4
13.1
Valuation Ratios
EV / EBITDA
P/E
EV / Net Sales
Sales / Equity
Market Cap / Sales
Price to Book Value
12.5
15.6
3.2
0.5
3.4
1.6
13.9
13.4
3.6
0.4
3.5
1.4
16.1
14.9
4.0
0.3
4.0
1.3
15.6
18.5
3.8
0.3
3.9
1.3
8.9
11.4
2.8
0.4
2.8
1.2
Turnover Ratios
Asset turnover
Debtors Turnover Ratio
0.5
2.6
0.4
5.3
0.3
5.2
0.3
5.2
0.4
5.2
Creditors Turnover Ratio
3.1
3.0
3.0
3.0
3.0
Solvency Ratios
Debt / Equity
Current Ratio
Quick Ratio
Debt / EBITDA
0.1
4.9
4.0
0.8
0.2
5.1
3.9
1.4
0.1
6.6
4.3
1.8
0.1
6.9
4.6
1.8
0.1
5.7
4.1
1.0
Per Share Data

EPS
Cash EPS
BV
Operating profit per share
Page 24
Tables and ratios (Consolidated)

Exhibit 47: Profit & loss account (consolidated)
(| Crore)
Net Sales
Other Income
Total Revenue
FY11
611.9
15.1
627.0
FY12
701.3
27.1
728.4
FY13E
732.4
43.4
775.8
FY14E
914.4
27.2
941.6
FY15E
1,140.5
34.0
1,174.5
Operating Expenditure
Employee Expenses
Administrative Expenses
Total Operating Expenditure
365.8
22.6
47.1
435.5
427.2
29.4
53.4
509.9
442.8
30.9
56.0
529.7
550.1
32.4
58.8
641.3
665.9
34.0
61.8
761.7
EBITDA
Interest
PBDT
Depreciation
PBT
Total Tax
PAT before MI
Minority Interest
PAT
176.4
11.3
180.2
8.1
172.1
58.7
113.4
5.2
108.2
191.3
21.1
197.4
9.3
188.1
59.3
128.8
9.7
119.1
202.7
43.8
202.4
14.4
188.0
64.7
123.3
18.0
105.3
273.1
53.5
246.8
16.8
230.1
81.7
148.4
30.7
117.7
378.8
50.5
362.4
19.2
343.2
119.0
224.2
38.6
185.6
26.5
29.2
25.8
28.8
45.4
EPS
Exhibit 48: Balance sheet (consolidated)

(| Crore)
Equity Capital
ESOP
Reserve and Surplus
Total Shareholders funds
FY11
40.8
0.6
1,023.7
1,065.2
FY12
40.8
0.8
1,113.4
1,155.1
FY13E
40.8
0.8
1,193.5
1,235.2
FY14E
40.8
0.8
1,283.1
1,324.8
FY15E
40.8
0.8
1,424.3
1,466.0
83.0
100.2
100.2
100.2
100.2
543.9
666.6
740.2
695.6
638.9
15.3
21.5
21.5
21.5
21.5
1,707.4
1,943.4
2,097.2
2,142.1
2,226.6
210.6
31.2
179.4
29.0
16.7
234.9
40.0
194.9
29.0
8.1
254.9
54.4
200.5
29.0
8.1
295.9
71.2
224.8
29.0
8.1
338.0
90.3
247.7
29.0
8.1
87.4
174.8
174.8
174.8
174.8
Inventory
Debtors
Loans and Advances
Cash
Other Current Assets
Total Current Assets
Creditors
Provisions
Net Current Assets
936.4
173.3
293.3
237.7
64.8
1,705.5
271.5
39.2
1,394.8
1,049.1
197.5
366.9
150.2
88.6
1,852.3
272.0
43.7
1,536.6
1,226.1
202.6
324.4
168.0
70.9
1,992.0
265.9
41.3
1,684.8
1,301.1
231.5
281.2
154.9
73.8
2,042.5
290.9
46.2
1,705.4
1,209.3
232.3
442.8
169.9
105.9
2,160.3
332.5
60.8
1,767.0
Total Assets
1,707.4
1,943.4
2,097.2
2,142.1
2,226.6
Minority Interest
Total Debt
Deferred Tax Liability
Total Liabilities
Total Gross Block
Less Total Accumulated Depreciation
Net Block
Goodwill on Consolidation
Total CWIP
Investments
Page 25
Exhibit 49: Cash flow statement (consolidated)

(| Crore)
Profit after Tax
Depreciation
Cash Flow before working capital changes
FY11
108.2
8.1
127.6
FY12
119.1
9.3
149.5
FY13E
105.3
14.4
163.5
FY14E
117.7
16.8
188.0
FY15E
185.6
19.2
255.2
Net Increase in Current Assets

Net Increase in Current Liabilities
Net cash flow from operating activities
(207.2)
65.5
(14.0)
(234.3)
5.0
(79.8)
(121.9)
(8.5)
33.2
(63.7)
29.9
154.1
(102.7)
56.2
208.6
(Purchase)/Sale of Fixed Assets

Other Investments
Others
Net Cash flow from Investing Activities
(28.5)
60.7
6.4
38.7
(16.2)
(87.4)
23.4
(80.2)
(20.0)
0.0
(20.0)
(41.0)
(41.0)
(42.1)
(42.1)
Change in Equity Capital

Change in Loan Fund
Others
Net Cash flow from Financing Activities
0.0
123.2
(43.1)
80.1
122.7
(50.3)
72.4
73.6
(68.9)
4.7
(44.7)
(81.6)
(126.3)
(56.7)
(94.8)
(151.5)
Net Cash flow

Opening cash & cash equivalent
Closing cash & cash equivalent
104.8
133.0
237.7
(87.5)
237.7
150.2
17.8
150.2
168.0
(13.2)
168.0
154.9
15.0
154.9
169.9
Exhibit 50: Ratio analysis (consolidated)

(Year-end March)
Per Share Data
EPS
Cash EPS
BV
Operating profit per share
FY11
FY12
FY13E
FY14E
FY15E
26.5
28.5
260.9
43.2
29.2
31.4
282.9
46.9
25.8
29.3
302.5
49.6
28.8
32.9
324.4
66.9
45.4
50.1
359.0
92.8
Operating Ratios
EBITDA / Total Operating Income
PAT / Total Operating Income
28.8
17.7
27.3
17.0
27.7
14.4
29.9
12.9
33.2
16.3
Return Ratios
RoE
RoCE
RoIC
10.2
9.9
11.7
10.3
9.5
10.3
8.5
9.1
9.9
8.9
12.1
13.1
12.7
16.3
17.7
Valuation Ratios
EV / EBITDA
P/E
EV / Net Sales
Sales / Equity
Market Cap / Sales
Price to Book Value
11.0
14.9
3.2
0.6
2.7
1.5
11.2
13.5
3.1
0.6
2.3
1.4
10.9
15.3
3.0
0.6
2.2
1.3
8.0
13.7
2.4
0.7
1.8
1.2
5.6
8.7
1.8
0.8
1.4
1.1
Turnover Ratios
Asset turnover
Debtors Turnover Ratio
Creditors Turnover Ratio
0.4
3.5
2.3
0.4
3.6
2.6
0.4
3.6
2.8
0.4
3.9
3.1
0.5
4.9
3.4
Solvency Ratios
Debt / Equity
Current Ratio
Quick Ratio
Debt / EBITDA
0.5
5.5
2.5
3.1
0.6
5.9
2.5
3.5
0.6
6.5
2.5
3.7
0.5
6.1
2.2
2.5
0.4
5.5
2.4
1.7
Page 26
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns

ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey
Head Research
pankaj.pandey@icicisecurities.com
ICICIdirect.com Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No. 7, MIDC,
Andheri (East)
Mumbai 400 093
research@icicidirect.com
ANALYST CERTIFICATION
We /I, Deepak Purswani, CFA PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE) research analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this
research report accurately reflect our personal views about any and all of the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to
the specific recommendation(s) or view(s) in this report. Analysts aren't registered as research analysts by FINRA and might not be an associated person of the ICICI Securities Inc.
Disclosures:
ICICI Securities Limited (ICICI Securities) and its affiliates are a full-service, integrated investment banking, investment management and brokerage and financing group. We along with affiliates are leading
underwriter of securities and participate in virtually all securities trading markets in India. We and our affiliates have investment banking and other business relationship with a significant percentage of
companies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection processes. ICICI Securities
generally prohibits its analysts, persons reporting to analysts and their dependent family members from maintaining a financial interest in the securities or derivatives of any companies that the analysts
cover.
The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and
meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without
prior written consent of ICICI Securities. While we would endeavour to update the information herein on reasonable basis, ICICI Securities, its subsidiaries and associated companies, their directors and
employees (ICICI Securities and affiliates) are under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities
from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities
policies, in circumstances where ICICI Securities is acting in an advisory capacity to this company, or in certain other circumstances.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This
report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their
receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific
circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate
the investment risks. The value and return of investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities and affiliates accept no liabilities for any
loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the
risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to
change without notice.
ICICI Securities and its affiliates might have managed or co-managed a public offering for the subject company in the preceding twelve months. ICICI Securities and affiliates might have received
compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in respect of public offerings, corporate finance, investment
banking or other advisory services in a merger or specific transaction. It is confirmed that Deepak Purswani, CFA PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE) research analysts and the authors of
this report have not received any compensation from the companies mentioned in the report in the preceding twelve months. Our research professionals are paid in part based on the profitability of ICICI
Securities, which include earnings from Investment Banking and other business.
ICICI Securities or its subsidiaries collectively do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month preceding the publication of the
research report.
It is confirmed that Deepak Purswani, CFA PGDM (FINANCE) Bhupendra Tiwary MBA (FINANCE) research analysts and the authors of this report or any of their family members does not serve as an
officer, director or advisory board member of the companies mentioned in the report.
ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. ICICI Securities and affiliates may act upon or make use
of information contained in the report prior to the publication thereof.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,
publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities
described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and
to observe such restriction.
Page 27

ICICIdirect MahindraLifespace Coverage PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ICICIdirect MahindraLifespace Coverage PDF

Uploaded by

Copyright:

Available Formats

Initiating Coverage

January 11, 2013

Mahindra Lifespace Developers (GESCOR)

Quality player at an attractive valuation

YoY Growth (%) (consolidated)

Valuation Summary (consolidated)

Equity Capital (| crore)

Comparative return matrix (%)

Residential portfolio New launches to drive sales volume

SEZ well positioned portfolio in every stage of SEZ

Management track record & better leverage provides us comfort

At 0.6x its NAV, valuations are attractive

Mahindra Lifespace Developers (MLDL) is one of the leading real estate

ICICI Securities Ltd | Retail Equity Research

Source: Company, ICICIdirect.com Research

Shareholding pattern (Q2FY13)

Mahindra Lifespace Developers (MLDL) is a leading real estate developer

FII & DII holding trend (%)

One of the differentiating factors for MLDL is its presence in SEZ

Exhibit 2: Timeline of MLDL

Mahindra Industrial Park Ltd,

Converted into public limited company

Mahindra World City

Mahindra World City

Company name changed

Source: Company, ICICIdirect.com Research

Exhibit 3: Company structure of MLDL

Mahindra World City

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Exhibit 4: Residential project portfolio

Residential portfolio to contribute 70% to our target price

Source: Companys Quarterly investor presentations, ICICIdirect.com Research

MLDL also has MoUs of about 4.5 mn sq ft of residential

Exhibit 5: MLDL Ongoing project portfolio

Last base Price

Source: Companys Quarterly investor presentations, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Exhibit 6: MLDL Forthcoming projects

Exhibit 7: MLDL landbank projects

Source: Company, ICICIdirect.com, Research

Pimpri Commercial Project

Source: Company, ICICIdirect.com, Research

Chennai Residential development riding on SEZ development

Exhibit 8: Ongoing projects in Chennai

Source: Companys Quarterly investor presentations, ICICIdirect.com Research

Exhibit 9: Forthcoming & Land bank in Chennai

Source: Companys Quarterly investor presentations, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Average Property prices

Source: Liases Foras, ICICIdirect.com Research

Exhibit 11: But absorption remains robust

Source: Liases Foras, ICICIdirect.com Research

Sales subdued now; expected to revive in FY15E with new launches

Boosted by the forthcoming project pipeline of 6.1 mn sq ft

FY12 H1FY13 FY13E FY14E FY15E

Source: Company, ICICIdirect.com Research

Hencerevenue recognition to see jump in FY15E only

As we highlighted above, given the slowing sales volume in FY13E-14E

ICICI Securities Ltd | Retail Equity Research

Exhibit 13: Revenues recognition & contribution to consolidated revenues

Revenue contribution (RHS)