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YES Securities
Sunteck Realty (Buy)
Target: ₹443
CMP: ₹309.60
In recent years, Sunteck Realty (SRIN) has successfully launched, sold and executed projects across all price points, thereby increasing its brand visibility and winning a bigger pie in micro markets of its presence. Additionally, SRIN has secured first mover advantage in most projects. Its asset light model ensures a lean balance sheet (FY21 D/E:0.21x) which we believe would stay intact in coming years. Given the ‘Sunteck 3.0’ strategy of asset light expansion, low leverage, consistent project wins, and organised and execution focused development coupled with recovery in residential demand, SRIN would further increase its market share. Hence, we have valued SRIN on the SoTP with residentials valued on an NPV based NAV approach, capturing all projects completed (₹1,820 crore), under construction (₹2,040 crore), planned (₹2,610 crore) and business development (₹410 crore).
Result/Concall Highlights: Pre sales for Q4-FY21 stood at ₹371 crore compared to ₹349.20 crore in Q3-FY21; For FY21, pre-sales stood at ₹1,021.70 crore Vs ₹1,200 crore in FY20; Company reported highest ever quarterly collections of ₹321 crore in Q4-FY21 compared to ₹252.50 crore in Q3FY21; and net debt for FY21 stood at ₹497.80 crore and Net debt/Equity was 0.24x.
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