ICICI Securities research report on Sunteck Realty
Sunteck Realty’s (SRIN) has launched Phase 1 of its affordable housing project in Vasind, located in Mumbai Metropolitan Region’s (MMR) extended eastern suburbs. The project which was acquired under the asset light JDA model in FY21 has a total saleable area of 2.6msf in which SRIN has 80% revenue share. We estimate revenue of Rs2.7bn for Phase 1 of the project (1,000 units launched) and the overall project to have revenue potential of Rs12-13bn with pre-tax operating surplus of over Rs5.0bn and NAV accretion of Rs2.8bn (Rs20/share).
We maintain our BUY rating on SRIN with a revised target price of Rs475/share (earlier Rs457) based on 1x NAV adjusting for project level adjustments. Key risks to our call are slowdown in the Mumbai property market volumes and fall in residential / commercial prices.
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