India’s residential and commercial projects industry is experiencing significant growth, with the residential construction market projected to reach USD 189.80 billion in 2024, expanding to USD 272.67 billion by 2029. Concurrently, the commercial real estate sector is expected to grow from USD 40.71 billion in 2024 to USD 106.05 billion by 2029, reflecting a robust demand for housing and office spaces across urban centers.
With a market capitalization of Rs 7,219.58 crore, the shares of Sunteck Realty Ltd closed at Rs 492.85 per share, increased around 0.31 percent as compared to the previous closing price of Rs 491.35 apiece.
Brokerage Recommendations:-
Jefferies, one of the well-known brokerages globally, gave a ‘Buy’ call on real estate stock with a target price of Rs 700 apiece, indicating a potential upside of 42 percent from Thursday’s closing price of Rs 493 per share.
Rational:-
As per the brokerage, Sunteck Realty demonstrated strong sales momentum and a solid balance sheet, supporting its long-term growth. In Q2FY25, net profit surged 348% YoY to ₹35 crore, with revenue rising 578% YoY to ₹169 crore. Pre-sales increased by 33% to ₹524 crore, while collections grew 25% to ₹267 crore.
Moreover, the company has a diverse city-center development portfolio spanning 52.5 million sq ft across 32 projects, including a major project in Mumbai’s Nepean Sea Road, a Bandstand in Bandra, and an international project in Dubai’s Burj Khalifa district.
Financial performance:-
Analyzing the company’s financial condition, revenue magnified by 11 percent from Rs 25 crore in Q1FY24 to Rs 169 crore in Q1FY25, during the same time frame net profit zoomed by 350 percent from Rs 14 crore loss to Rs 35 crore profits.
Upcoming project:-
A Dubai project, set to launch in FY26, is projected to have a gross development value (GDV) exceeding ₹9,000 crore, backed by a ₹250 crore investment for a 50% profit share. The Nepean Sea Road project, with a GDV of ₹2,500 crore, is progressing with site clearance underway. Further launches are expected amid low inventory.
Management guidance:-
Management targets 30%-35% growth in pre-sales for FY25, driven by ongoing projects. Upcoming launches, including new phases at existing sites, are expected to boost sales. The company is also exploring new opportunities, focusing on high equity multiples to expand its portfolio.
Challenges:-
Management remains cautious about over-committing on sales forecasts, setting a conservative 30%-35% growth target to ensure delivery capabilities. Approval processes, especially for the Nepean Sea Road project, are a critical factor for timely launches and project execution.
Company profile:-
Sunteck Realty Limited is an India-based company, which is engaged in the activities of real estate development of residential and commercial projects. It is engaged in real estate activities with owned or leased property. It focuses on a city-centric development portfolio of approximately 52.5 million square feet spread across 20 projects.
Written by:- Abhishek Singh
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