Mahindra Lifespace Developers Limited — Q4 FY25 earnings call

Call held 28 Apr 2025

Management summary

Mahindra Lifespaces delivered a strong Q4 FY25, marked by robust growth in total income and operating cash flows, alongside a significant increase in residential sales volume and GDV additions. The company maintained a healthy net debt to equity ratio and outlined ambitious targets for pre-sales and GDV, while addressing past challenges in project IRRs and regulatory approvals. The focus remains on premium projects and strategic capital allocation to drive future growth.

Highlights

  • Total Income (full consolidation) for FY25 was ₹1,446 crores, up 44.6% from ₹1,000 crores in FY24.

  • Income from operations (Ind AS) for FY25 was ₹372 crores, an 86% increase from ₹200 crores in FY24.

  • Operating cash flows reached an all-time high of ₹832 crores in FY25, driven by a 30% growth in residential collections.

  • Residential sales volume grew 28.7% to 3.18 million sq. ft. in FY25, compared to 2.47 million sq. ft. in FY24.

  • The company added ₹18,100 crores in GDV in FY25, a significant increase from ₹4,400 crores in FY24, indicating strong land acquisition and project pipeline build-up.

Concerns

  • IC land sold declined by 28.6% to 85 acres in FY25 from 119 acres in FY24.

  • The company acknowledged past issues with project IRRs, with some older projects (pre-FY18) yielding only 3% due to delays and design issues.

  • Regulatory approval delays continue to be a challenge, impacting project launch timelines, as highlighted by management regarding Project Pink and NewHaven.

Key financials

  1. Total Income (Consolidated) ₹1,446 Cr +44.6%YoY
  2. Income from Operations (Ind AS) ₹372 Cr +86%YoY
  3. Operating Cash Flows ₹832 Cr +30%YoY
  4. Residential Sales Volume 3.18 million sq. ft. +28.7%YoY
  5. IC Land Sold 85 acres -28.6%YoY
  6. Net Debt to Equity Ratio 0.39

What they filed

Q1 FY27: revenue up 2906.3%, net profit up 68.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue8 167 9 32 18 +125%459 +175%670 +7344%962 +2906%
EBITDA-48 -25 -55 -55 -52 −8%30 +220%-44 +20%94 +271%
Net profit-14 -22 85 51 48 +443%109 +595%90 +6%86 +69%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • IC Business
    ₹126 Cr PAT5% Revenue Growth
  • Residential Business
    20% Pre-sales Growth

Order book

high confidence

Total value

₹2,804 Cr

as of 2025-03-31 quantified

Pipeline

other

Project pipeline in various stages (1, 2, 3)

The company aims to build its business to 8,000 to 10,000 crores in pre-sales, requiring 45,000 crores of GDV.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Gross ₹900 Cr Cost 9%
    • Repayment Will cut down long-term debt as much as possible using rights issue proceeds.
    roughly we have 900 crores of long term debt.
  • M&A Bhandup land parcel Acquisition · Closed · Consideration ₹[object Object] (undisclosed)

    One of the largest deals, took 19 months to close, significant GDV potential.

    Contributes significantly to the 39,000 crores GDV pipeline.

    A key example was the Bhandup deal that we did, it was one of the largest and many of us were really worried, can we do this kind of deal and then can we actually execute on the deal. At least we have done the first part. Not only us but our competitors were also surprised that we could do such a deal. It took us 19 months to close that but finally we are able to get something like this in our bag.
  • M&A Lokhandwala deal Acquisition · Announced · Consideration ₹[object Object] (undisclosed)

    Part of the FY25++ pipeline projects.

    Captured in the 39,000 crores GDV pipeline.

    Then FY25++ means we have Lokhandwala deal that we announced in April, that is also captured there.
  • Liquidity Liquidity disclosed Operating cash flows of ₹832 crores, highest ever, mainly from residential collections, supporting growth aspirations.
    highest ever 832 crores is what we have overall operating cash flows mainly led by these residential collections which has grown about 30%.

Guidance & targets

Pre-sales

  • Annual Pre-sales Pre-sales · Long-term · High confidence ₹8,000-10,000 crores
    a strong and bold mission to build our business to a relevant 8,000 to 10,000 crores in pre-sales

    — Mr. Amit Kumar Sinha – MD & CEO, Mahindra Lifespaces

GDV

  • Total GDV GDV · Long-term · High confidence ₹45,000 crores
    which will require us to build something like 45,000 crores of GDV.

    — Mr. Amit Kumar Sinha – MD & CEO, Mahindra Lifespaces

  • Total GDV GDV · by FY27 · Medium confidence ₹10,000 crores

    Previously ₹8,000 crores → ₹10,000 crores

    instead of 8000 as the one bookshelf, book end of the shelf, why don't we get to 10,000 and say hey, let's take another two years to actually get there

    — Mr. Amit Kumar Sinha – MD & CEO, Mahindra Lifespaces

  • Residential GDV GDV · Long-term · High confidence ₹9,500 crores

    From ₹2,800 crores today

    But the biggest growth is in the residential from 2800 to 9500.

    — Mr. Amit Kumar Sinha – MD & CEO, Mahindra Lifespaces

Segment Mix

  • Affordable Segment Presence Segment Mix · by FY30 · High confidence 0 affordable projects
    FY30 will have 0 affordable. And we don't have plans to participate in affordable for the time being.

    — Management

Profitability

  • PBT Margin Profitability · Ongoing · High confidence 18-20%
    Largely, that 18% to 20% band that we talked about, does get maintained over projects. That's on the PBT margins, 18% to 20%.

    — Mr. Avinash Bapat - CFO, Mahindra Lifespaces

  • Project IRR Profitability · Ongoing · High confidence 20-22%

    Previously 18-20% → 20-22%

    if we were okay with a required rate of return or IRR of about, say, between 18 to 20%, we are now targeting things that are upwards of 20%, between that 20 to 22% range

    — Mr. Avinash Bapat - CFO, Mahindra Lifespaces

Launches

  • GDV of Launches Launches · Next year · Medium confidence ₹6,000-7,000 crores
    GDV of launch is around 6,000-7,000? Between 6,000 to 7,000.

    — Mr. Amit Kumar Sinha - MD & CEO, Mahindra Lifespaces

What to watch in Q1 FY26

Rights Issue Deployment Timeline

Next quarter
Current Internal deliberations ongoing, announcement 'very soon'
Target Specific dates for rights issue and deployment strategy

Why it matters

Deployment of rights issue funds is crucial for funding growth aspirations and debt reduction.

So, my short answer is very soon, you know, we haven’t yet exactly decided the exact dates and all that but you should hear something very soon.

Risks & concerns

  • Market slowdown, especially in luxury segment

    medium

    Industry slowing down, especially on the luxury side, can dilute IRRs due to extended timelines and changes in velocity/pricing.

    Because we are already seeing the industry slowing down especially on the luxury side, when that happens your IRRs get diluted because the time gets extended, the velocity changes, the pricing increase doesn't come through.

    Management acknowledged

  • Regulatory approval delays

    medium

    Approvals for projects like Pink and NewHaven have caused delays, impacting launch timelines.

    I was warned that you will ask this question. What's your short-term guidance, right? You know us, we have never given because I wish I can predict when the approvals will come, right? And as we saw in the past financial year, if we had approvals, I would have been much higher than what we are at right now.

    Management acknowledged

  • Cost estimation and project execution issues

    low

    Past issues with poor cost estimation and managing remote locations have been addressed through new processes and contingency budgets.

    most of the issue in the past were our, let's say, poor estimation on the cost, some new surprises coming up, something happening. And then timing was our other issue because of our inability to manage, let's say, some of the remote locations. The remote location affordable has given us the most pain, because it's very difficult to manage those sites. So actually, we are getting out of that.

    Management addressed

Q&A highlights

6 direct
Deployment of funds from rights issue Direct
So, short answer to your question is actually is when --- as early as possible, okay. To be very honest actually we had some internal deliberations and we thought let us first actually declare our annual results. We didn’t really want to go to the market with 9 month numbers and then the investing community can have a good impression or a bad impression about what happens on the results front, we thought let’s go formally with everything on the cards and then go through with the rights issue. So, my short answer is very soon, you know, we haven’t yet exactly decided the exact dates and all that but you should hear something very soon.

Analysts are keen on the timeline and strategy for deploying capital from the rights issue for growth, especially given the company's ambitious GDV targets.

Asked by Mr. Parikshit

Scaling sales and execution capabilities for increased GDV Direct
So, let me address this question point wise. First is in terms of the sales capacity, right. I think like the business development deals where you know there are financial guardrails, we have to ensure that we meet those financial guardrails. In terms of capacity building, it is very easy to build capacity. But then if suppose you don't have enough projects on a particular line then what do you do with that excess capacity. It is a very dynamic process where you build capacity at a right time in a way that people are completely engaged in the sales process. So as of today I think we are very well capitalized we can take care of the projects that we spoke about and which was shown and then at the right time obviously we will add capacity depending upon which project is going to come at what time. Not a worry there.

With significant GDV additions, analysts are probing the company's readiness in terms of sales force, channel partners, and project execution to convert pipeline into actual sales and deliveries.

Asked by Mr. Parikshit

Accounting methodology (POCM vs. full consolidation) Partial
Yes, so good question, Parikshit. So, you are right, few of the developers have kind of not changed or have moved to this. There are a few who are contemplating about how do we do it. In our case as well, we are contemplating taking a conscious call through our advisors, our auditors, our bankers etc. as to how do we actually transition to that kind of methodology. As we do that, obviously, new guidances, new guidelines are also coming up. Ind AS may be allowed, may be not allowed. So, we will consciously look at it. We are working on it. In the meantime, we are thinking of how do we kind of bring out more to you. If there is a way where we can cast our accounts in a percentage completion method and if that can be displayed to the public, maybe we can try to do that in the interim. So those are the things that we are all working on. Let us see how we progress on that.

Analysts are questioning the current accounting method (completed contract) and the potential shift to Percentage of Completion Method (POCM) for better representation of profitability, which is a key industry trend.

Asked by Mr. Parikshit

Andheri Lokhandwala project margins/IRR Direct
So, I will tell you fundamentally as Amit said, when we look at any project I mean obviously, the financial guardrails have to be met. So, there is no emotion because you know I like the area or it is a great area and you would love to do that. If the financial guardrails are not met, we will not go ahead. And we have said no to many, many, many projects.

Analysts are concerned if the aggressive bidding and redevelopment nature of the Lokhandwala project might dilute margins or IRR compared to other projects, given the competitive market.

Asked by Mr. Rahul Jain

Bhandup project monetization strategy and timeline Direct
We have been conservative in our base case. Let's say, if it is 12,000 crores, let's assume 8 to 9 years to sell out that. But that is not our aspiration. Construction could be a few years longer because the last phase will take some more time. I think we will maximize IRR. Given it is with a partner, we will look at the best interest of both the partners. For our partner, the cash is very important. They will want to maximize the cash. For us, cash plus IRR is important. So, we will do the right thing in terms of adjusting the velocity, price point. But at the end, this allows us to create a very successful marquee project which will have a premiumness attached to it. And I think, the base case is a starting point for financial. But in real world, we will adjust the business conditions.

Given the large scale of the Bhandup project (₹12,000 crores GDV), analysts are seeking clarity on the monetization strategy, timelines, and how the company balances sales velocity with price realization and IRR.

Asked by Mr. Rahul Jain

Transition from affordable to premium brand perception Direct
Yeah, it is a great question and I think it is not an easy one, let me just tell you, because many times I have been called the CEO of Mahindra Affordable Housing, by people that do not know, and those who know Mahindra very well. And I keep reminding them, even today I had given an interview, they were saying Mahindra Life Sciences. So, I think we have to do a better job of getting our brand understood.

The analyst questions how Mahindra Lifespaces plans to shift its brand perception from an affordable player to a premium one, and what specific strategies are in place beyond product offerings.

Asked by Mr. Pritesh

Embedded EBITDA margins on new business development Partial
No, not 30%. Let me try to answer. I think we have struggled with making this comparison or analysis and here is the reason why. In the project, you have IRR and PBT. At a company level, you have EBITDA. The reason is because you have three components of a cost, which is payroll cost, which is not inventorized. You have other non-payroll costs like consulting, due diligence, etc. And then you have sales and marketing. These are the three costs which are below the line. Gross margins minus these three give you EBITDA.

Analysts are trying to reconcile project-level IRRs and PBT with company-level EBITDA margins, especially for new business development, to understand the true profitability and compare with peers.

Asked by Mr. Parikshit

Safeguards against IRR dilution in future projects Direct
Now, there are few things that we have to address this dilution, IRR dilution that typically happens. And if you can create a cushion for yourself, it allows you to absorb as much of dilution, right? The dilution could happen on the velocity side, the dilution could happen on the pricing side and dilution could happen on the cost side, dilution could happen on the timing side, right? And in the past, we have classified all those things, how much happened because of velocity. Velocity has never been an issue for us. Mahindra projects, even in the bad, before COVID when the market was low, we sell 30 to 40% in 90 days, that is a thumb rule. Whatever we launch, 30 to 40% will go away; never been an issue.

Following up on past projects with low IRRs, analysts are seeking assurance on the measures taken to prevent similar dilutions in the IRR of new projects, focusing on pricing, velocity, cost, and timing.

Asked by Participant

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Detailed narrative

Strategic Vision and Building Blocks

Mahindra Lifespaces aims to achieve ₹8,000-10,000 crores in pre-sales, requiring a Gross Development Value (GDV) of ₹45,000 crores. This strategy is built on six pillars: portfolio choices (focusing on Mumbai, Pune, Bangalore, exiting affordable segment), robust business development, enhanced customer experience, efficient project execution, monetization of existing Industrial & Commercial (IC) land parcels, and financially sound capital allocation. The company has exited Nagpur and Hyderabad and will temporarily pull back from new projects in NCR to focus on core markets.

Financial Performance Overview (FY25)

For FY25, Mahindra Lifespaces reported a total income (full consolidation) of ₹1,446 crores, a 44.6% increase from ₹1,000 crores in FY24. Income from operations (Ind AS) grew 86% to ₹372 crores from ₹200 crores in FY24. The company achieved record operating cash flows of ₹832 crores, driven by a 30% growth in residential collections. The net debt to equity ratio remained healthy at 0.39, reflecting prudent financial management.

GDV Growth and Land Bank Strategy

The company added ₹18,100 crores in GDV in FY25, a substantial 4X increase from ₹4,400 crores in FY24. This growth is supported by a robust pipeline of ₹25,000-30,000 crores worth of projects in various stages of development. Management stated that 70-80% of the land required to meet the ₹8,000-10,000 crore pre-sales aspiration is already secured. The residential GDV is targeted to grow from ₹2,800 crores to ₹9,500 crores, with a target of ₹10,000 crores GDV by FY27.

Project Profitability and IRR Improvement

Mahindra Lifespaces has shown significant improvement in project IRRs, with FY25 projects achieving 26%, up from 21% in FY23 and 3% for pre-FY18 projects. The company is now targeting project IRRs in the 20-22% range, an increase from the previous 18-20% target. This improvement is attributed to changes in costing methodologies, a dedicated costing center of excellence, and conservative business case modeling to absorb potential shocks. The PBT margin is consistently maintained in the 18-20% band across projects.

Market Dynamics and Pricing Strategy

The residential market, particularly in the top seven cities, has grown in FY24 (calendar year). The company observed robust demand, with 4,000 people walking into their Vista site in 30 days, and 1,000 potential customers. Despite healthy price increases in launches like Vista Phase-2 and IvyLush Phase-2, demand remains strong. While the market has seen moderation in price increases over the last four years, the overall demand side is expected to remain strong. The company balances sales velocity with price realization to maximize IRR.

Operational Excellence and Capacity Building

The company is focusing on strengthening its internal capabilities, including procurement and contracts teams, and hiring strong local heads for project execution. Attrition rates have been reduced to below 20% through investments in people development and training programs. The channel partner network has been expanded with a dedicated team across retail, institutional, and 'Rest of India' models to enhance distribution and customer engagement. The company is also working on improving its brand perception to align with its premium offerings.

Capital Structure and Debt Management

Mahindra Lifespaces maintains a healthy net debt to equity ratio of 0.39, one of the lowest in the industry. The company has approximately ₹900 crores of long-term debt. Proceeds from the upcoming rights issue will be primarily used to reduce this long-term debt and fund growth aspirations. The cost of debt has been kept under 9%, with good rates secured for commercial paper issuances, ensuring fiscal prudence while pursuing aggressive growth.

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