But does Indiabulls and other real estate companies have the title the land? Many of these companies' claim land banks include land for which they only have an agreement to buy. Usually, getting the land in their names come after years of litigation.

That's why I like Mahindra Lifespace in this sector. The company develops SEZs from lands provided by development authorities of state governments. So they are not embroiled in litigation so far.

Mahindra Lifespace enjoys a first mover advantage. A number of international manufacturing companies are already functioning from the SEZ set up by ML outside Chennai. The company is leveraging on its experience at the Jaipur SEZ as well.

Other things going for ML include lower debt and management's plan to expand using internal accruals. Interest rate burden would be far lower. (In the short-term one can expect the company's construction business to suffer from the downturn. Hopefully the next quarterly results will bring about some amount of pessimism regarding the company's stock!)

While the biggies like DLF and Unitech are now available at P/Es of 4 and 5,  ML is still going strong at a P/E of 20. The promoters obviously enjoy  higher credibility among investors.....


Edited by shivkumar - 24/Sep/2008 at 11:10am

pessimism is what i meant. The company has a number of construction projects in the housing sector which is experiencing a slowdown. The SEZs are managed by wholly owned subsidiaries whose consolidated results come only at the end of the year. So in the short-term the stock would be battered even though the share of the construction business in the overall pie of ML is lower.

When the so-called sector leaders are available at P/Es of four and five, don't expect ML to stay afloat at higher levels for long!

Will add at below Rs 300 levels, funds permitting!

I think Indiabulls is run by very competent people - Rajiv rattan and Sameer Gehlaut.