Stock to buy for long-term: Prabhudas Lilladher sees 60% upside in Sunteck Realty shares

Sunteck Realty shares are projected to have a potential upside of over 60%, based on an analysis by domestic brokerage Prabhudas Lilladher (PL Capital). Although the brokerage has reduced its target price for Sunteck Realty from ₹700 to ₹650, it anticipates a surge in the stock in the near future. Sunteck Realty shares today were trading nearly 1% lower at ₹398.10 apiece around 13:13 IST.

PL Capital forecasts a growth of over 20% CAGR in the company’s presales during FY25-27E, supported by ongoing projects and a robust pipeline of new launches, including the Dubai joint venture project. Additionally, considering the expected strong cash flow generation, the brokerage predicts that Sunteck Realty will increase its new project additions, which will serve as a significant driver for stock performance.

“Our FY26E stands reduced as we factor in revenue booking from One World project in FY27 however our FY27E largely remain unchanged. Maintain ‘Buy’ rating with a revised TP of ₹650/share,” said the brokerage in its report.

Further, while discussing about the company's growth, PL Capital is of the opinion that the BKC and Max World projects contributed to the acceleration in sales, while the newly introduced phase 1 project on Nepean Sea Road supported pre-sales.

BKC and Max World projects aided sales momentum

The brokerage's report indicated that Sunteck Realty achieved an EBITDA of ₹687 million in comparison to ₹486 million in Q3FY25, benefiting from the BKC projects. Year-over-year, consolidated revenues fell by 52% to ₹2 billion. For FY25, revenues increased by 51%, supported by contributions from the BKC and Max World (Naigaon) project, resulting in total annual revenues of ₹8.5 billion. The PAT was reported at ₹504 million, up from ₹425 million quarter-over-quarter and down from ₹1 billion year-over-year.

Pre-sales aided by the newly launched Nepean Sea Road phase 1 project

The company's pre-sales saw a 28% year-over-year increase, reaching ₹8.7 billion, which is also a 37% rise quarter-over-quarter, supported by the launch of the new Nepean Sea Road project. The ultra-luxury projects, including the 3 BKC projects and the Nepean Sea Road initiatives, accounted for 66% of the total pre-sales, amounting to ₹5.73 billion, while the high mid-income developments, such as Sunteck City, Beach Residencies, and Sky Park projects, contributed 27%, or ₹2.35 billion, to the overall pre-sales.

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