Sunteck Realty Stock Trades Near 52-Week High As New Bookings Rise

Sunteck Realty saw collections and pre-sales rising over 70% quarter-on-quarter in October-December period.

Cranes operate at a property development in Noida, Uttar Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)
Cranes operate at a property development in Noida, Uttar Pradesh, India. (Photographer: Prashanth Vishwanathan/Bloomberg)

Shares of Sunteck Realty Ltd. jumped to their highest in nearly a year after the real estate developer recorded a surge in new bookings in the third quarter.

Pre-sales or new bookings of the Mumbai-based developer rose 75% sequentially to Rs 349 crore in the October-December period, according to its quarterly business update released on the bourses on Tuesday. The increase was 7% year-on-year.

Collections, too, rose 79% over the preceding three months and 52% year-on-year to Rs 252 crore during the reported period.

While pre-sales turned positive on a year-on-year basis for the first nine months of FY21, collections remain 15% lower, the filing said.

“As operations resume post lockdown, the company has continued its strong sales momentum, supported by its ready-to-move-in, nearing-ready inventory as well as newly launched projects. With construction activity returning to pre-Covid levels, the company remains focussed on accelerating project progress across the portfolio to offset the time lost on account of the ongoing pandemic,” it said.

“A combination of favourable factors such as the reduced stamp duty and low interest rates is expediting the home purchase decision. We are observing a trend of increased demand and renewed buyer interest for high-quality products, especially those with strong balance sheet and high brand recall,” Kamal Khetan, chairman and managing director at Sunteck Realty, was quoted as saying in the filing. “With project execution ramping up, collections across our projects have been sequentially growing and we remain confident to maintain this strong trend.”

Maharashtra has slashed fees paid by developers for approvals of residential projects by half last week. Premiums will be reduced by 50% and developers who take the benefit of these reductions will have to pay stamp duty on behalf of the home buyers. According to data from Liases Foras, more than 3,189 projects with 2.5 lakh units are currently ongoing in the Mumbai Metropolitan Region. The state had earlier reduced stamp duty in August last year to aid the sector.

Still, ICICI Direct said financial numbers of real estate companies will look optically weak due to rental waiver in the retail segment, sub-optimal hospitality portfolio, albeit quarter-on-quarter growth will be robust. “The key highlight will be strong sales volumes growth, led by factors like pent-up demand, benign interest rates and measures like the stamp duty cut in Maharashtra,” the brokerage said in its pre-earnings note.

Shares of Sunteck Realty gained as much as 4.3% in early trade on Tuesday to Rs 387 apiece — the highest since Feb. 20, 2020. The stock is up for the fourth straight day. Of the 11 analysts tracking the stock, 10 have a ‘buy’ rating and one suggest a ‘hold’. The stock trades 8.9% higher than its Bloomberg consensus 12-month price target of Rs 345.1 apiece.