Subscribe to Suraj Estate Developers: Geojit

Geojit, has come out with its report on Suraj Estate Developers. The research firm has recommended to “ Subscribe ” the ipo in its research report as on December 15, 2023.

Broker Research

December 18, 2023 / 11:49 IST

IPO

Geojit, IPO report on Suraj Estate Developers

Suraj Estate Developers Ltd (SEDL), established in September 1986, is a marquee real estate construction company with over 35 years of experience across the residential and commercial sectors with a primary focus on value luxury, luxury, and commercial segments. Specializing in the redevelopment of tenanted properties under Regulation 33(7) of the Development Control and Promotion Regulations (DCPR) in Mumbai, their primary operational focus is the South-Central region, covering Mahim, Matunga, Dadar, Prabhadevi, and Parel. From 1986 to 2023, SEDL has successfully completed 42 projects, encompassing both residential and commercial developments (97.62% being redevelopment projects). The prestigious projects of SEDL are ICICI Apartments, NEAT House, Saraswat Bank Bhavan, CCIL Bhavan, etc. From 2016 to H1FY23, SEDL leads among the top developers, enjoys holding a market share of ~17.25% as per absorption (in units) in the combined submarkets. (Source: Anarock Research). In South Central Mumbai, MHADA (Maharashtra Housing and Area development Authority) data reveals a total of 19,642 old, dangerous & dilapidated buildings, yet to redeveloped, provides a great opportunity for re-developers like Suraj.

Valuation and Outlook

At the upper price band of Rs.360, SEDL is available at a P/Bv of 3.3x (FY24E Annualised), which appears to be fairly priced. Considering its consistent growth in both topline and bottomline, healthy return ratios, asset light business model, redevelopment opportunities and promising industry outlook, we assign a “Subscribe” rating on a short to medium term basis.

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