Sunteck Realty rallied 6 percent to Rs 479 on November 21 after brokerage firm Motilal Oswal initiated “buy” coverage on the counter with a target price of Rs 640, implying 33 percent upside from the current price.
In the past three months, the realty major has jumped 27 percent against a percent rise in the benchmark Sensex.
Analysts at Motilal Oswal expect Sunteck Realty to deliver a healthy 25 percent compounded annual growth rate (CAGR) over FY23-26, fuelled by ramp-up in launches from both new and existing projects.
The company’s sound balance sheet, strong cash flow, and recent partnership with IFC would spur project additions and drive a sustainable growth trajectory, they said.
“We anticipate Sunteck to deliver Rs 4,500-5,000 crore worth of units at its projects in Naigaon and Goregaon, driving 72 percent revenue CAGR over FY23-26 and multi-fold growth in PAT to Rs 3,500 crore,” the brokerage firm added.
Sunteck’s pre-sales growth was subdued during FY14-18 (posting a 10 percent CAGR over the period), however, it accelerated to 22 percent over FY18-23, led by three new project launches.
Now, the company is gearing up for the next leg of growth, with two new project launches planned in Kalyan and the Nepean Sea Road. Cumulatively, the company is lining up Rs 5,700 crore worth of launches and successive phases in existing projects (Rs 3,500) over the next two-three years.
Some key risks were the delay of launches, subdued sales, which would lead to longer monetisation timeline and lower discounted value, Motilal Oswal analysts warned.