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All eyes on upcoming launches

Sunteck Realty’s (SRIN) clocked healthy sales bookings of Rs3.5bn in Q3FY22 (flat YoY) along with quarterly collections of Rs2.7bn (up 7% YoY). In 9MFY22, the company has clocked Rs8bn of sales bookings (up 23% YTD) and expects to clock overall FY22 sales bookings of Rs13bn on the back of the Feb’22 launch of Phase 3 in Naigaon of 1.25msf vs. FY21 sales bookings of Rs10.2bn. The company has given a formal guidance of Rs18bn of FY23E sales bookings which is expected to be driven by 3.35msf of new launches including the Vasai project and new phases in ODC, Goregaon and Naigaon. The company continues to pursue new land acquisitions primarily through the asset-light JDA model. We maintain our BUY rating on SRIN with an unchanged target price of Rs590/share based on 1x FY22E NAV. Key risks to our call are slowdown in the Mumbai property market volumes and fall in residential/commercial prices.

Resilient sales and collections: SRIN’s Q3FY22 sales bookings of Rs3.5bn were flat YoY and were driven by continued momentum in ODC, Goregaon, Naigaon and other projects. SRIN also achieved healthy quarterly collections of Rs2.7bn in Q3FY22 (up 7% YoY). In Sep’21, the company also did a soft launch for its Vasind project christened “Sunteck Forest World”. In 9MFY22, the company has clocked Rs8bn of sales bookings (up 23% YTD) and expects to clock overall FY22 sales bookings of Rs13bn on the back of the Feb’22 launch of Phase 3 in Naigaon of 1.25msf vs. FY21 sales bookings of Rs10.2bn.

All eyes on upcoming FY23E launches: SRIN has given a formal guidance of Rs18.0bn for FY23E sales bookings which is largely expected to be driven by 3.35msf of planned launches during the year across new phases of ODC, Goregaon (0.6msf), Naigaon (1.0msf), Kalyan/Vasind (1.0msf) and Vasai (0.75msf). Of these, the Vasai launch is targeted in H1FY23 subject to approvals coming through. For its Borivali project of 0.5msf, the company is targeting an early FY24 launch subject to the land owner getting approvals (this is a JDA project).

Shahad project addition cements SRIN’s position in MMR’s extended suburbs: SRIN has recently announced plans to develop a residential township spread over 50 acres with saleable area of 10msf at Shahad, Kalyan located in MMR’s extended Eastern suburbs. The new project has been acquired under the asset-light Joint Development (JDA) revenue share model with ~75-80% of revenues to accrue to SRIN with 100% of construction costs to be borne by SRIN. SRIN now has a significant presence in peripheral areas of MMR with 11.8msf of area in MMR’s extended Western suburbs (7.3msf in Naigaon and 4.5msf in Vasai) and 12.6msf in MMR’s extended Eastern suburbs (2.6msf in Vasind and 10.0msf in Shahad).

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