Research Reports On Sunteck Realty By ICICI-Direct & Axis Direct
Research Reports On Sunteck Realty By ICICI-Direct & Axis Direct | |
Company: | Sunteck Realty Ltd |
Brokerage: | Axis Direct, ICICI-Direct |
Date of report: | June 23, 2017 |
Type of Report: | Investors' Presentation, Result Update |
Recommendation: | Buy |
Upside Potential: | 30% |
Summary: | Sun(teck) set to rise!!! |
Full Report: | Click here to download the file in pdf format |
Tags: | ICICI-Direct, IDBI Capital, Sunteck Realty Ltd |
Initiating Coverage Research Report By ICICI-DirectSun(teck) set to rise!!! Sunteck Realty (SRL) is a Mumbai based real estate player with development potential of ~23 mn sq ft (msf) spread across 24 projects and four rented assets. Out of this, SRL enjoys strong cash flow visibility from its completed and ongoing projects (4.24 msf). We expect SRL to generate | 3311 crore from these projects over the next few years. The completed projects in BKC along with ongoing projects in Goregaon coupled with comfortable leverage (debt-equity at 0.53x) lend us comfort on the valuation and growth prospects. We initiate coverage on SRL with a target price of | 570 (0.9x FY19E NAV). Research Report by Axis DirectStrong Q4; positive cash flow outlook Despite demonetization, Sunteck Realty (SRL) reported strong performance during rest of the year with pre-sales up 17% YoY and collections up 12% YoY. The company generated strong operating cash flow which helped in reducing debt by ~Rs 3 bn at ~Rs 8.5 bn (net D/E of 0.47x) in FY17. Management targets to lower debt to ~Rs 5 bn. We expect operational performance to improve in FY18 on (1) improved traction at BKC projects (all three projects are now complete), which can drive collections and (2) launch of Avenue 3– smaller ticket size than Avenue 2 and thus should receive strong response. We increase our pre-sales assumptions to factor in fading impact of demonetization. We also roll forward our valuation to arrive at our revised TP of Rs 503 (vs. Rs 329 earlier). |
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