Sunteck Realty Sees Robust Pre-Sales In Q4FY21
In Q4FY21, the real estate developer’s sales rose 6% sequentially to Rs370 crore, aided by the Bandra Kurla Complex (BKC) and Oshiwara District Centre (ODC) projects. Analysts say the company’s BKC project has started to contribute to sales after a hiatus, which is a positive. Having said that, the Sunteck’s strategy of reducing its dependence on big-ticket sized items should bode well for its earnings performance going forward.
In a report, analysts at Kotak Institutional Equities pointed out that the company’s sales mix has shifted from 64% of sales from BKC in FY2016 to a more modest 6% of sales in FY2020. “The key shift for Sunteck has come from the change in the company’s strategy with new projects in Naigaon that have been supplemented by similar low-cost projects in Vasai, Vasind and more recently Borival,” said the report.
In Q4FY21, Sunteck’s mid-income segment clocked its highest-ever sales in FY21, up 77% year-on-year, led by the ODC project. However, lack of new launches pushed sales for fiscal year 16% lower. The company added three projects – Vasai, Vasind and Borivali spanning about 8 million square feet to its development portfolio during the year.
Meanwhile, collections at Rs320 crore and Rs780 crore for the quarter and full fiscal, respectively, were the best ever that the company has seen. According to analysts at Edelweiss Securities Ltd, the company’s low gearing provides room to leverage its balance sheet and capitalise on attractive land purchase opportunities to grow its net added value. New project launches are a key stock catalyst.