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Strong pre-sales momentum continues

Quick Pointers:

? Achieved 34% YoY growth in pre-sales led by Nepean Sea & Mira-road projects

? Collections to see uptick from Q4FY26 with official Nepean Sea Road launch

Sunteck Reality (SRIN) reported strong pre-sales (34% YoY) and collections (up 24% YoY) in Q2. SRIN’s proven ability to market ultra-luxury projects, aggressive and multi-pronged land acquisition capabilities in various micro markets across Mumbai Metropolitan Region (MMR) is an interesting play on Mumbai’s high value real estate market. We expect the company’s pre-sales to grow to +23% CAGR over FY25-27E, aided by ongoing projects and strong new launches pipeline including the Dubai JV project. Further given likely strong cash flow generation, we see SRIN to step up new project additions which will be a key catalyst for stock performance. Our FY26E and FY27E revenue stands cut by 11-13% given delay in revenue booking from Avenue 4 and few other projects. Maintain ‘Buy’ rating with revised TP of Rs. 600/share.

ODC 4th Avenue aided sales momentum: Operationally, SRIN reported EBITDA of Rs 778mn vs Rs 374mn in Q2FY25; with EBITDA margins at 30.8% in Q2 vs 22.1% in Q2FY25. Consolidated revenues increased by 49% YoY to Rs. 2.5bn on account of revenue booking of ODC 4th Avenue in Q2FY25. PAT came in at Rs. 490mn vs Rs 346mn YoY and Rs. 334mn QoQ. During the quarter, the company reported net debt of Rs. 1.26bn; increased by Rs.530mn QoQ.

Pre-sales aided by Nepean Sea and Mira Road projects: SRIN’s pre-sales improved 34% YoY to Rs 7.02bn (up 7% QoQ); aided by Nepean Sea and Mira Road projects. Nepean Sea Road project contributed ~39% to the total pre-sales in 1HFY26 while Mira Road project contributed 26%+. There were no new launches in 1HFY26. Overall, Uber luxury projects (3 BKC projects and Nepean Sea Road projects) contributed 40% (Rs 2.8bn) to total pre-sales while high mid-income projects (Sunteck City, Beach residencies, Sky Park projects) contributed 47% (Rs. 3.31bn) to total pre-sales in Q2. During Q2, average realization increased 52% YoY (down 27% QoQ) to Rs. 16,871 psf. Collections grew by 24% YoY and declined 6% QoQ to Rs3.3bn.

Key con-call takeaways: (1) Aggressive business development investments – New BD activity continues to be aggressive where SRIN invested Rs 4.3bn in H1FY26 vs Rs 1.8bn in FY25. During 1HFY26, SRIN added two projects, a project at Andheri with an estimated GDV of Rs 11bn, and a JV project at Mira Road with a GDV of Rs 12bn. Management reiterated its medium-term goal to double GDV (currently ~Rs 391bn) in 3–4 years, driven by sustained BD and launches. (2) New launches plan for 2HFY26 – Upcoming launches includes 5th Avenue (residential and commercial) at ODC, new tower at Vasai, Naigaon, and Mira Road, a redevelopment project at Andheri, and marquee launches at Nepean Sea Road (under the new “Emaance” brand) and Dubai. The official Nepean Sea launch is targeted for Q4FY26. (3) Dubai Project - The company has already secured an office space in Dubai, with interiors and design finalized; approvals are in progress with its strategy to extend “the Emaance” luxury brand globally. (4) 5th Avenue (commercial and residential): Approvals are awaited, and construction will commence post-clearances. (5) Nepean Sea Road- Demolition work is expected to be completed within 15–30 days, with approvals at an advanced stage. (6) Presales and Collection guidance - The company reiterated its pre-sales growth guidance of 30–35% YoY. Management expects a pickup in collections from Q4FY26, driven by the official launch of the Nepean Sea Road project and progress across ongoing developments. (7) SRIN generated Rs 2.6bn of net operating cash flow in H1FY26 (+35% YoY), supported by 80% collection efficiency. (8) Net debt to equity stood at 0.04x in Q2.

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