Mahindra Lifespace Developers is looking to grow fivefold in five years and hit Rs 10,000 crore of pre-sales by FY30. Managing director and CEO Amit Kumar Sinha tells Raghavendra Kamath that the company is exiting the affordable space and will focus on the premium segment. Excerpts:
What is prompting the move from a new launch-heavy model to a more sustenance-based one when conventional developers are focussing more on launches to drive sales?
Sustenance-driven sales make the business more predictable and stable. New launches are dependent on getting approvals as per plan before the launch. Any delay in approvals affects the new launches. Over the past year or so, the environment clearance issue in the Mumbai Metropolitan Region (MMR) has affected the industry’s new launches.
You are phasing out affordable housing to focus on the premium space. Is it prudent when rates are on a decline and affordable housing is rate-sensitive?
Interest rate changes will certainly help the affordable segment in the near term, but such projects face multiple structural challenges. They have been challenging for us on both the demand and cost sides. To make affordable segments’ economics work, we ended up taking land parcels far away from job centres and the connectivity never materialises. Consequently, we have taken the decision to exit the affordable segment after carefully evaluating the commercial aspects and financial returns.
The affordable segment for the industry has de-grown from 45% in CY21 to 17% in Q1FY26. The premium/mid-premium segment has grown from 49% to 65% during the same time. We remain committed to play in the premium segment.
Housing sales in MMR and Pune fell 30% to 41,901 units in the April-June period due to a surge in prices. What has been your experience?
MMR and Pune witnessed fewer launches in the April-June quarter, driven majorly by environment clearances which impacted the volumes. The project launches have been focussed on the premium and luxury segments, resulting in healthy pricing growth due to the location and mix of projects. We continue to see strong sales momentum in our existing premium projects in MMR and Pune. Marina 64, our recent launch in Malad, is seeing very good traction. We also sold more than 70%+ of our inventory in the month of launch in Citadel Tower L in Pune.
How are the land prices behaving as a number of land deals have been happening in the market?
Post-Covid, the strong momentum in the residential real estate market has led to an increase in land prices across the board. That is expected to continue till the current upcycle lasts. We could see the land prices moderating over time. We remain disciplined in our underwriting, targeting over 20% project IRRs (internal rate of returns) and healthy profitability. The company has a total project pipeline of around Rs 41,000 crore with around Rs 5,700 crore of launches planned in the near term.
Please elaborate on your new launches…
We launched Mahindra NewHaven, Citadel Tower L in the first quarter. Marina64, our first redevelopment project in Malad, Mumbai, was launched in the second quarter, and we have an exciting set of launches planned for the remainder of the year. We are working towards launching our premium residential project in Hopefarm, Whitefield, in the third quarter and have planned our second redevelopment project in Mahalaxmi, Mumbai in Q3/Q4. This project has progressed very well and we are preponing the launch by a few months. We are focusing our efforts to launch the first phase of Bhandup, Mumbai, by Q4, and also working on launching our project in Pimpri this year. In total, we will have around `6,500 crore worth of projects/phases in FY26. This number was about Rs 4,200 crore in FY25.
You have an expansion plan for a gross development (GDV) value of `45,000 crore. How do you plan to fund this?
Our stated target is to achieve 5x growth in five years by reaching Rs 10,000 crore of pre-sales by FY30. To achieve that, we need to have GDV worth Rs 45,000 crore. We are already at Rs 41,000 crore as of June 2025. The majority of the expansion has been through joint development agreements and redevelopment in Mumbai, which is not very capital-intensive. With the recently concluded rights issue, we have repaid our long-term debt and have a much healthier balance sheet. Our net debt-to-equity ratio is -0.23 as of June. It positions us very well to target growth beyond the GDV target of Rs 45,000 crore.