1. Ramping up of sales drive Sunteck Realty’s operations

Ramping up of sales drive Sunteck Realty’s operations

We met the management of Sunteck Realty (SRL) to understand its strategy and outlook for FY17-18.

By: | Updated: October 14, 2016 1:29 PM

We met the management of Sunteck Realty (SRL) to understand its strategy and outlook for FY17-18. The company reported strong pre-sales of `3.4 billion in 5 months of H1FY17, up 46% y-o-y from `2.3 billion in H1FY16. Collections too improved significantly at `2.76 billion during H1FY17 YTD, up 67% y-o-y from Rs 1.65 billion in H1FY16.

Resurgence in operations has been driven by SRL’s strategy of ramping up sales and EPC team (hired 40 mid/senior level professionals in Q4) and aggressive advertising and marketing (in print media and hoardings). Management also highlighted strong outlook for FY17 (40-45% y-o-y growth in pre-sales).
We adjust our sales timelines to factor in the improved sales traction at BKC and Goregaon projects going ahead. Avenue 2 project saw strong traction (sales of `1.4 billion in 5 months of H1FY17 YTD vs. `0.3 billion in H1FY16) driven by affordable ticket sizes (<`15 million) and infrastructure improvement (opening of new Oshiwara flyover).

BKC projects too drew a good response with sales  of `1.37 billion (sold 1 unit in Signature Island and 4 units in Signia Isles) in H1FY17 YTD. The company expects strong traction to continue in September as well SRL can generate net cash flows of `40-45 bn from its BKC and Goregaon Phase 1 projects over the next 3-4 years.

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