Mahindra Holidays: New Leadership to Drive Long-Term Growth Story

Nandan Madhiwalla of Punctilious One presented his thesis on Mahindra Holidays and Resorts India (India: MHRIL) at Asian Investing Summit 2025.

Thesis summary:

Mahindra Holidays & Resorts operates under the Club Mahindra brand and offers vacation ownership memberships that grant customers access to a growing network of resorts across India and parts of Europe. At the heart of the business is an upfront membership model that generates float-like capital to fund resort expansion, with revenue recognized slowly over the life of the membership. Though the company’s European subsidiary, Holiday Club Resorts (HCRO) in Finland, has underperformed — particularly post-COVID and due to the Russia-Ukraine conflict — its core India operations have seen a steady improvement in customer satisfaction, occupancy, and cash flows.

In recent weeks, shares of MHRIL traded around ₹325, giving the company a market capitalization of ₹6,600 crore (approximately $765 million). This values the business at less than 1x estimated replacement cost, and the company generates a 5% cash flow from operations yield despite the drag from HCRO. A management transition at both the Mahindra Group and MHRIL itself over the last few years has sharpened operational focus. In particular, the new leadership, in place since May 2024, is expected to accelerate a shift from a historically aggressive “push” model of member acquisition to a more sustainable “pull” strategy backed by better infrastructure and higher customer satisfaction.

The Club Mahindra business is inherently capital-efficient, as the upfront membership fees finance resort development, which in turn enables more memberships to be sold. The company has guided for room inventory to grow from 6,000 by FY25 to 10,000 by 2030, unlocking the potential to add over 200,000 new members. Meanwhile, expiring legacy memberships free up further inventory without additional capex. The deferred revenue pool — essentially revenue visibility over the next several years — continues to build, providing embedded earnings momentum and cash flow stability.

While risks remain, including ongoing losses at HCRO and shifting consumer vacation preferences, MHRIL is clearly transitioning from a legacy of operational inefficiencies to a more disciplined, customer-centric growth story. With improving fundamentals, substantial embedded value in deferred revenue, and a market valuation below the cost to replicate its assets, MHRIL presents a compelling case for long-term investors willing to look past near-term headline noise.

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About the instructor:

Nandan Madhiwalla is a co-founder and managing partner of East72 Capital Management and Advisors. East72 Capital is a long only India focused fund.

Previously, Nandan has founded and served as the Principal Officer of a SEBI Registered Investment Advisory firm from August 2018 to March 2024, providing equity research-based investment advisory services. Nandan has also held the position of Research Analyst at PPFAS Mutual Fund from May 2015 to February 2018, where he focused on Indian and US stocks in the financial and media sectors. Additionally, he contributed to investment models and reports at Lebenthal Asset Management (Sep 2014 – Mar 2015) and conducted buyside equity research at The Roosevelt Investment Group, Inc (Feb 2012 – Jan 2014). Early in his career, he worked as a Junior Underwriter at FGI Finance, conducting due diligence for asset-based loans.

Nandan holds a CFA Charter (2016) and a Master of Science in Financial & Risk Engineering from New York University (2011). He also earned a bachelor’s in computer science engineering from D J Sanghvi College of Engineering, Mumbai (2008).