Sunteck Realty: A Play on Mumbai’s High-Value Real Estate Market

Sunteck Realty Limited (SRIN) is an Indian real estate development company with a focus on the Mumbai Metropolitan Region (MMR). The company has a proven track record of marketing ultra-luxury projects, and has been aggressive in acquiring land in various micro markets across the MMR.

We believe that SRIN is well-positioned to benefit from the strong demand for high-value real estate in Mumbai. The MMR is home to a large and affluent population, and the city is experiencing rapid economic growth. This is driving demand for high-quality residential and commercial real estate.

SRIN has a strong portfolio of projects in progress and under development. The company’s ongoing projects are well-located and have a strong demand pipeline. SRIN is also planning to launch several new projects in the coming years.

We expect SRIN’s pre-sales to grow by 2x over the next three years, driven by the strong demand for its projects and the company’s aggressive land acquisition strategy. We also expect the company to generate strong cash flow over the next few years, which will enable it to step up new project additions.

SRIN has adopted an asset-light model, which has helped it to acquire scale without straining its balance sheet. This is likely to continue in new project additions. We expect the company’s revenue and EBITDA CAGR to be ~83% and ~123%, respectively, over FY23-26E.

We initiate coverage on Sunteck Realty with a “Buy” rating and a DCF-based NAV of Rs565 per share. This implies a 42% upside from current levels.

Key Highlights

• SRIN is a leading real estate development company in Mumbai with a proven track record of marketing ultra-luxury projects.
• The company has a strong portfolio of projects in progress and under development.
• We expect SRIN’s pre-sales to grow by 2x over the next three years.
• The company is likely to generate strong cash flow over the next few years, which will enable it to step up new project additions.
• SRIN has adopted an asset-light model, which has helped it to acquire scale without straining its balance sheet.
• We expect the company’s revenue and EBITDA CAGR to be ~83% and ~123%, respectively, over FY23-26E.
• We initiate coverage on Sunteck Realty with a “Buy” rating and a DCF-based NAV of Rs565 per share.

We believe that SRIN is a strong investment opportunity for investors seeking exposure to the high-growth Mumbai real estate market. The company’s strong track record, diversified portfolio, and asset-light model make it well-positioned to capitalize on the growth opportunities in the MMR.

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