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Thursday, June 24, 2021

CLSA sees over 25% upside in this Mumbai-based realty player

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NEW DELHI: Shares of Sunteck Realty advanced nearly 6 per cent in Thursday’s trade after CLSA initiated the coverage on the Mumbai-based realty firm with a ‘Buy’ rating and set a target price of Rs 345. The target price implies a potential upside of 26 per cent from current levels of Rs 272.

The brokerage said Sunteck has shifted its focus from value to volume and thus gained market share in Mumbai.

“It has ramped up its portfolio using an asset-light approach and we are positive on its value-accretive acquisition potential,” CLSA said in a report.

It further added that the real estate player is benefitting from consolidation due to its strong brand, the faster velocity of sales and a healthy balance sheet with net debt-to-equity (D/E) ratio of 0.26 times.

“With consolidation accelerating, we are positive on Sunteck’s value-accretive acquisition potential. However, a Mumbai housing market slowdown remains a key risk,” it said, adding the launch of the Vasai project, with ticket sizes of Rs 5-10 million, coupled with steady Naigaon sales, may lead to further market share gains.

Meanwhile, the BSE Realty index traded 1.62 per cent higher at 1,689 in later morning session. Prestige Estate, Indiabulls Real Estate, Brigade Enterprises, Oberoi Realty and Godrej Properties were also up between 1 per cent and 5 per cent at around the same time.

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