In the current investment landscape, our focus is on mid-cap companies demonstrating robust revenue visibility and sustained growth momentum in their margins. We prefer those companies with lower leverage, indicating a healthier balance sheet and reduced financial risk. However, it’s important to acknowledge the inherent difficulty in short-term forecasting due to market volatility. Despite the challenges in predicting short-term trends, we maintain confidence in the long-term potential of selective mid-cap companies. At the current juncture, amidst significant volatility in the Indian market, Mahindra Lifespace’s and Shakti Pumps (India) Ltd.’s growth trajectory appears to be intact.

Mahindra Lifespaces’ recent launch of Kandivali Phase 1 has surpassed expectations, with pre-sales exceeding Rs. 800 crores, marking a pivotal moment for the company. This achievement lays the foundation for substantial value creation in the foreseeable future. Looking ahead, Mahindra Lifespace aims to elevate its Gross Development Value (GDV) from Rs. 15,000 crores to Rs. 45,000 crores within the next 5 years. The company’s strategic focus on lucrative micro markets and premium segments positions it for significant growth. Under the adept leadership of Mr. Anish Shah, Mahindra Lifespace has emerged as a growth gem within the Mahindra Group. The envisioned trajectory includes a target of growing revenue by 5x over the next 5-7 years, indicating a clear path toward expansion and enhanced profitability. In terms of market valuation, reputed real estate companies like Mahindra Lifespace are typically valued at 5x EV/sales by us, signaling a substantial upside potential of around 25% for the company from the current price.

Our other pick is Shakti Pumps (India) Ltd. as it is expected that over 69,000 pumps is expected to be installed over the next two-year period and healthy revenue guidance coupled with stable quarterly performance, the top line and order book of the company looks promising for the coming period ensuring robust growth for the company. Under the PM KUSUM Scheme, over 35 Lakh solar pumps will be installed until FY28. The average price of installing a solar pump is around Rs. 3 Lakh, so the total market opportunity stands at Rs 1,050 Billion. Therefore being a market leader in the industry, Shakti Pumps India Ltd is poised to benefit from such a scheme over the years. Considering the long-term scenario, the high energy targets set by the government coupled with the ease of installation of the company’s products, are expected to drive the market going ahead. These factors coupled with volatile fuel prices associated with fuel-based pumping systems are about to create ample opportunities for solar-based pumping systems. The current macro situation, a healthy order book, and rising government support towards the sector make us constructive on the company and assign a buy rating that has arrived at a 26% upside from the current price.