Buy Sunteck Realty; target of Rs 415: Motilal Oswal

What happened

Sunteck Realty's pre-sales rose 17% year on year to INR8.2b in 2QFY27, roughly in line with Motilal Oswal's estimates. First-half bookings grew 19% to INR16.1b despite no launches. The broker reiterated BUY with a target price of INR415.

Confirmed

Global impact / market context

A buy rating with a target price, which means the broker's expected share value, points to the gap between the current price and that target. Pre-sales growth without new launches suggests existing projects are selling, supporting future cash collection and revenue recognition.

Analyst inference

The stock trades at about a 35% discount to its net asset value, which means the estimated worth of its projects minus debt. A INR70b launch pipeline and management's 25% growth guidance are the operating drivers behind the broker's growth assumption.

Analyst inference

What to watch

1. Management reiterated 25% pre-sales growth guidance for the current year, so quarterly bookings should be compared against that stated pace rather than the prior year alone. Confirmed
2. Motilal Oswal expects a 25% annual pre-sales growth rate reaching INR49b over FY26-28E, which depends on converting the INR70b launch pipeline into actual bookings. Proposed
3. If launches at Belvedere Park, Mira Road and Andheri slip, pre-sales and cash available for construction spending could fall short, weakening the case for the INR415 target. Analyst inference

Evidence

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