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SUNTECK REALTY
OUTPERFORMER (RS416, MCAP: RS2.6BN / US$60M
• Sunteck Realty Limited (SRL) is a promising premium residential player in the MMR with a strong portfolio
comprising 32.2msf saleable area across 26 projects (SRL’s effective interest, 13.8msf). Most projects of SRL enjoy
favorable locations (city-centric, easy accessibility etc) – a key criteria for acquisition as well as reason for price
premium over peers.
• Unlike peers which turned cautious during the downturn, SRL continued to build its portfolio via auctions, JV/ JDAs,
SRA (23msf/5.4msf in FY09/FY10).
• SRL’s flagship project, Signature Island, is a high-end luxury residential offering (0.71msf of saleable area; effective
interest, 0.62msf) in BKC, an MMRDA master-planned commercial region in Mumbai.
o SRL has pre-sold 30 of 80 apartments in the project at an average price of ~Rs36,000 psf, with the last sale having
been concluded at Rs42,000 psf
o Construction is progressing well and the project is expected to complete by FY12
o Overall, we expect net cashflows of more than Rs16bn from the project over FY11-14.
• SRL has a busy pipeline of projects scheduled for launch in the next 12-15 months. The company plans to launch 11
projects over the period. Some key launches are Sunteck City, Goregaon (~1.6msf, 100% owned); Signia City, Mulund
(~2msf, Phase I 1msf, effective stake 25%); and Sunteck City, Thane (8msf, phase I 1.2msf, effective stake 37.5%).
• To date, SRL has booked sales of more than Rs16bn and received ~Rs5bn in advances. With an aggressive launch
pipeline, the company expects to generate significant cashflows over FY12-14 (~US$1bn).
• With low debt on the books (~Rs3bn; SRL’s share, ~Rs1.7bn), SRL plans to utilize project cashflows to materially step
up land acquisitions and new project launches.
• SRL expects a significant jump in reported financials from FY12 as it follows the project completion method of
revenue recognition. Its first project, Signature Island, is expected to be completed in H2FY12.
• Our FY12E NAV for SRL is Rs776 per share. We expect SRL to provide steady upsides to our NAV by adding
NAV-accretive projects.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
SUNTECK REALTY
OUTPERFORMER (RS416, MCAP: RS2.6BN / US$60M
• Sunteck Realty Limited (SRL) is a promising premium residential player in the MMR with a strong portfolio
comprising 32.2msf saleable area across 26 projects (SRL’s effective interest, 13.8msf). Most projects of SRL enjoy
favorable locations (city-centric, easy accessibility etc) – a key criteria for acquisition as well as reason for price
premium over peers.
• Unlike peers which turned cautious during the downturn, SRL continued to build its portfolio via auctions, JV/ JDAs,
SRA (23msf/5.4msf in FY09/FY10).
• SRL’s flagship project, Signature Island, is a high-end luxury residential offering (0.71msf of saleable area; effective
interest, 0.62msf) in BKC, an MMRDA master-planned commercial region in Mumbai.
o SRL has pre-sold 30 of 80 apartments in the project at an average price of ~Rs36,000 psf, with the last sale having
been concluded at Rs42,000 psf
o Construction is progressing well and the project is expected to complete by FY12
o Overall, we expect net cashflows of more than Rs16bn from the project over FY11-14.
• SRL has a busy pipeline of projects scheduled for launch in the next 12-15 months. The company plans to launch 11
projects over the period. Some key launches are Sunteck City, Goregaon (~1.6msf, 100% owned); Signia City, Mulund
(~2msf, Phase I 1msf, effective stake 25%); and Sunteck City, Thane (8msf, phase I 1.2msf, effective stake 37.5%).
• To date, SRL has booked sales of more than Rs16bn and received ~Rs5bn in advances. With an aggressive launch
pipeline, the company expects to generate significant cashflows over FY12-14 (~US$1bn).
• With low debt on the books (~Rs3bn; SRL’s share, ~Rs1.7bn), SRL plans to utilize project cashflows to materially step
up land acquisitions and new project launches.
• SRL expects a significant jump in reported financials from FY12 as it follows the project completion method of
revenue recognition. Its first project, Signature Island, is expected to be completed in H2FY12.
• Our FY12E NAV for SRL is Rs776 per share. We expect SRL to provide steady upsides to our NAV by adding
NAV-accretive projects.
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