Shares of Sunteck Realty surged over 6 percent on September 19 to hit an intraday high of Rs 620 on NSE amid heavy volumes. So far in the day, 54 lakh shares of the company changed hands on BSE and NSE combined, compared to the one-month average trading volume of 6 lakh shares.
The surge in volumes comes after Sunteck Realty informed that its executives will meet with analysts and institutional investors in Edinburgh and London between September 23-25, organized by Motilal Oswal Financial Services. Additionally, the technical chart showed a triangle breakout pattern, and Wave 5 unfolding.
At 11:16 am, Sunteck Realty shares were trading over 2 percent higher at Rs 585.60 on NSE. The stock has rallied 31 percent so far this year, outperforming Nifty's returns of 16 percent. In the past 12 months, the counter has risen 35 percent. In comparison, Nifty rose 27 percent during this period.
Prabhudas Lilladher is bullish on Sunteck Realty and recommended a 'buy' rating on the stock with a target price of Rs 700 in its research report dated August 19, 2024. Given likely strong cash flow generation and JV with IFC, the brokerage expects the firm to step up new project additions which will be a key catalyst for stock performance.
According to analysts, Sunteck Realty's proven ability to market ultra-luxury projects, aggressive and multi-pronged land acquisition capabilities in various micro markets across Mumbai Metropolitan Region (MMR) is an interesting play on Mumbai’s high-value real estate market.
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"We expect company’s pre-sales to grow +25% CAGR over FY24-26E aided by ongoing projects and strong new launches pipeline including new Dubai JV project," the brokerage said.
Adoption of asset-light model has enabled the company to acquire scale without straining its balance sheet. "Maintain ‘Buy’ rating with a revised TP of Rs. 700/share as we incorporate Dubai project," PL added.
For the quarter ended June 2024, Sunteck Realty's financials saw a dramatic increase of 348.16 percent year-on-year, with the profit standing at Rs 22.78 crore. This was a significant turnaround as the company had declared a loss of Rs 6.74 crore in the same period of the previous fiscal year.
However, compared to the previous quarter, the revenue declined by 25.91 percent. The company's Selling, General & Administrative (SG&A) expenses rose by 9.08 percent YoY. Despite the rise in expenses, the operating income showed a remarkable year-over-year increase of 403.44 percent, although it was down by 81.36 percent sequentially.
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