Sunteck Realty (SRL) clocked ~Rs 5 bn in pre-sales in Q4FY22 (up 36% YoY/43% QoQ). FY22 gross sales at ~Rs 13 bn are up 27% YoY. Collections throughout Q4FY22 elevated 26% YoY/50% QoQ to ~Rs 4 bn whereas FY22 collections at ~Rs 10.5 bn rose 35% YoY—each best-ever for SRL.
We count on a better gross sales trajectory for the corporate going forward with the housing cycle seemingly turning, sustained growth in undertaking portfolio (~23msf addition over final 18 months), launch of recent tasks/phases and launch of stock in current tasks. Maintain ‘Buy’ with a TP of Rs 590/share.
Robust efficiency: New gross sales worth shot up 36% YoY/ 43% QoQ to about Rs 5 bn throughout Q4FY22. FY22 gross sales at ~Rs 13 bn elevated 27% YoY (versus FY21 bookings of ~Rs 10.2 bn).
Collections keep robust: SRL reported collections of ~Rs 4 bn through the quarter, up 26% YoY/50% QoQ. FY22 collections at ~Rs 10.5 bn are up 35% YoY (FY21 collections have been ~Rs 7.8 bn). Collection effectivity in FY22 stood at 81% (76% in FY21). On each quarterly and annual foundation, that is the all time assortment within the firm’s historical past.
New launches, money flows and debt stay key variables: Since the onset of the pandemic, the corporate has added 5 tasks (Vasai, Vasind, Borivali, Kalyan and Pen-Khopoli) totalling ~23msf, leveraging the asset-light mannequin. Launch of tasks is important to boosting the gross sales momentum going forward, in our view. We count on that launch of tasks resembling Vasai, Naigaon Phase 3, Borivali and Kalyan will enhance the gross sales trajectory. We additionally imagine SRL’s give attention to money circulation administration ought to preserve its steadiness sheet wholesome going forward.
Outlook and valuation: New launches key; preserve ‘BUY’ – As we highlighted in our complete sector report, RERA-driven consolidation is throwing up development alternatives for organised gamers resembling SRL. We like SRL’s diversified presence within the Mumbai Metropolitan Region (MMR) and strong execution capabilities. Revival in housing demand and SRL’s give attention to money flows ought to maintain it in good stead. The firm’s low gearing gives room to leverage its steadiness sheet and capitalise on enticing land buy alternatives to develop its NAV. New undertaking launches are a key inventory catalyst, in our view. Maintain ‘BUY/SN’ with a goal value of Rs 590/share (on a par with NAV of Rs 590.