Sunteck Realty poised to register strong growth going forward

The Sunteck Realty stock gained about 3 per cent in the bourses today on the back of strong bookings in the December quarter of FY21. During the quarter, bookings increased 7 per cent to Rs 349 crore compared to the same period last year, mostly supported by ready-to-move-in units and units nearing completion. Further, with incentives from the Centre and low interest rates on home loans, the company is positioned to benefit from improving demand conditions. Also, the company has a strong presence in the Mumbai micro markets, where the inventory overhang is low, giving the company the ability to command better prices. Sunteck Realty is a Mumbai-based realty player operating across residential segments - the mid-income, luxury and premium segments. During the December quarter, its collections registered 52 per cent y-o-y growth to Rs 252 crore.

Bright prospects

Sunteck Realty derives nearly 80 per cent of its revenues from the residential segment, while the commercial and retail segments account for the rest. Over the past decade, it has acquired land parcels in the heart of Mumbai - BKC (Bandra Kurla Complex), ODC (Oshiwara District Centre) and Andheri - which has given it an early mover advantage. Recently, the company acquired about 50 acres in Vasind, Thane district. This has helped it command a premium for its properties. With a debt-equity ratio of 0.28 times, the company has enough room for expansion.

The company also has a strong pipeline of launches. Sunteck Realty recently launched the second tower at its SunteckCity 4thAvenue project. It also plans to launch Phase-3 of Sunteck WestWorld (Naigaon) and residential projects in Vasai and Vasind regions, besides three projects in Goregaon. With construction activity back at normal levels, the company would be able to stick to its delivery timeline for future projects. All these would aid the company in improving its revenue going ahead.

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