Prabhudas Lilladher’s recommendation to buy Sunteck Realty with a target price of Rs. 565, as outlined in their research report dated September 13, 2023.
Sunteck Realty (SRIN): An Overview
Prabhudas Lilladher has expressed a bullish outlook on Sunteck Realty, citing several factors that make the company an attractive investment in the high-value real estate market of the Mumbai Metropolitan Region (MMR).
Key Factors Driving the Buy Rating:
- Proven Marketing Ability: Sunteck Realty has demonstrated its ability to successfully market ultra-luxury projects. This expertise positions the company favorably in Mumbai’s competitive real estate landscape.
- Aggressive Land Acquisition: SRIN has a multi-pronged approach to land acquisition across various micro-markets in the MMR. This approach is expected to support the company’s growth.
- Sales Growth Expectation: Prabhudas Lilladher anticipates a significant increase in pre-sales for Sunteck Realty, with a projected growth rate of 2x over the next three years. This growth is attributed to ongoing projects and a strong pipeline of new launches.
- Cash Flow Generation: SRIN is expected to generate robust cash flow, estimated at Rs. 8-10 billion over FY23-26E. This financial strength is expected to facilitate new project additions, a key catalyst for stock performance.
- Asset Light Model: The adoption of an asset-light model has allowed the company to scale up without putting excessive strain on its balance sheet. This approach is likely to continue in new project additions.
Financial Projections:
Prabhudas Lilladher projects an impressive Revenue/EBITDA Compound Annual Growth Rate (CAGR) of approximately 83% and 123%, respectively, over the period from FY23 to FY26.
Prabhudas Lilladher’s Recommendation:
In light of the above factors and their positive outlook for Sunteck Realty, Prabhudas Lilladher initiates coverage on the company with a “BUY” rating. They have determined a target price (TP) of Rs. 565 per share, indicating a potential upside of 42% from the current levels.
In summary, Prabhudas Lilladher’s bullish stance on Sunteck Realty is driven by the company’s strengths in marketing, land acquisition, and projected sales growth. The anticipation of strong cash flow generation and an asset-light model further contribute to their positive outlook, resulting in a “BUY” rating with a target price of Rs. 565.
Disclaimer: Any views and investment tips expressed by any author, investment experts or agencies here on MSTimes are their own and not those of mine or website. I advises users to consult/check with certified Financial experts / advisors before taking any investment decisions.
