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Hidden Gem - Max Estates


Max Estates, is the real estate arm of Max Group, primarily focused in the Delhi-NCR region across residential and commercial developments. Its focus on premium residential and commercial development assets along with cash surplus balance sheet is yielding uncanny resemblance as “Oberoi of NCR region”.
It benefits from its exclusive strategic partnership with New York Life Insurance (invested till date almost ₹ 1200 crore) for its commercial projects.
It has turned net cash positive (₹ 54 crore) in Q2FY25 led by monetization of stake in couple of assets (₹ 392 crore), QIP fund raise (₹ 800 crore) and warrants issue (₹ 150 crore). Excluding lease rental discounting, it has a net cash surplus position of ₹ 600 crore).
Its residential portfolio comprises 6 projects with an aggregate GDV of almost ₹ 21000 crore (sold portion ~₹ 6800 crore) including its latest acquisition of 2.6msf of mixed-use development in Sector 105, Noida.
Consequently, it has a strong launch pipeline for the next 2-3 years of ₹ 14000+ crore. On commercial front, it has 4 operational assets (~1msf) and four under-construction assets (including latest acquisition, ~4.8msf), which provide annuity rental income potential of over ₹ 700 crore compared to ₹ 66 crore in FY24.
On business development front, it would continue to target atleast 3msf acquisitions across residential and commercial verticals per annum which would be well supported by its strong war chest of ~Rs. 1350 crore raised through QIP fund raise, warrants issue and monetisation of 49% stake in Max Towers & Max House.
At CMP of ₹ 531, the stock is trading at 3.9x P/B on FY2027E and 15% premium to NAV. We value MEL on SOTP basis and ascribe higher premium to NAV (considering its aggressive BD) to arrive at a price target of ₹ 741. We have a BUY rating on the stock.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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