Active Stocks
Tue May 28 2024 15:59:27
  1. Tata Steel share price
  2. 174.85 -0.37%
  1. HDFC Bank share price
  2. 1,530.50 0.17%
  1. ITC share price
  2. 428.90 -0.60%
  1. State Bank Of India share price
  2. 830.90 -0.38%
  1. Infosys share price
  2. 1,466.20 -0.37%
Business News/ Markets / Stock Markets/  Kolte Patil share price skyrockets 10%, doubles money in a year; Here's why Motilal Oswal sees 34% upside
BackBack

Kolte Patil share price skyrockets 10%, doubles money in a year; Here's why Motilal Oswal sees 34% upside

Kolte Patil share price has clocked robust gains in the last one year, doubling investors' money by jumping about 101 per cent over a year.

Kolte Patil share price has been on roll over the last year. (Pixabay)Premium
Kolte Patil share price has been on roll over the last year. (Pixabay)

Kolte Patil share price jumped almost 10 per cent in morning deals on Wednesday, April 10, after brokerage firm Motilal Oswal initiated coverage on the stock with a buy recommendation. 

Motilal Oswal has initiated coverage on the stock with a 'buy' recommendation, pegging the target price at 700, implying a 34 per cent upside.

Kolte Patil share price opened at 536 against its previous close of 517.45 and soon jumped almost 10 per cent to hit the level of 567.80 on NSE. Around 10 am, Kolte Patil share price traded 8.54 per cent higher at 561.65 apiece.

Also Read: PB Fintech share price jumps 7% to touch 52-week high on incorporation of subsidiary PB Pay

Kolte Patil share price has clocked robust gains in the last one year. As of the previous session's close, the stock has doubled investors' money, jumping about 101 per cent over a year. However, it has still underperformed the Nifty Realty index which has seen a whopping gain of 136 per cent in the same period. Equity benchmark Nifty 50 has gained about 29 per cent over a year.

"After a decade of muted performance, Kolte Patil Developers is witnessing strong growth in pre-sales as bookings reported 36 per cent CAGR over FY21-23. Given its strong pipeline, we believe the company can maintain a 25 per cent CAGR in pre-sales at least for the next two years with further room for growth from new project additions," said Motilal Oswal.

Also Read: Stocks to Buy: Indian Hotels, Godrej Properties, Sobha among 9 mid cap picks by Motilal Oswal Financial Services

The brokerage firm pointed out that the company's ability to close new project additions will determine the sustainability of growth but it believes the company's focus on growth as well as its strong balance sheet should enable it to focus on project acquisitions.

"Its past track record of steady margins and cash flows also implies that growth will be underpinned by profitability and execution," said Motilal Oswal.

Motilal Oswal expects Kolte Patil Developers to deliver a 22 per cent CAGR in pre-sales over FY24-26 to 4,500 crore.

"Targeted project additions over the next six to nine months can enable the company to sustain a healthy nearly 30-35 per cent CAGR over the next two years," Motilal Oswal said.

Moreover, Motilal expects the company's gross margin to recover to 34 per cent by FY26, as the impact of 9 per cent CAGR in realisation over FY21-23 will be realised in profit and loss with a lag.

This should result in EBITDA margin expansion to 17 per cent in FY26 from 9 per cent in FY24, leading to a 21 per cent CAGR in EBITDA over FY23-26E, Motilal said.

PAT margin may also recover to 8 per cent in FY26E, resulting in a PAT of 160 crore and a RoE (return on equity) of 14 per cent, similar to what the company clocked in FY18.

The inability to add new projects and any slowdown in demand momentum are the key risks, as per Motilal Oswal.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 10 Apr 2024, 09:23 AM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started