Sunteck recorded a low, Rs 75.50 crore worth of sales, during 1QFY17. It also highlighted its YTD performance where it logged incremental sales of Rs 260 crore. Further, Sunteck has changed its revenue recognition method to PoCM from PCM from 1QFY17, but with higher thresholds than that of peers following ICAI guidelines. We will publish detailed update post clarity on the accounting method and other business updates from the forthcoming analyst meet.
Sunteck reported one of its slowest quarterly sales at Rs 75.50 crore during 1QFY17. Sales were reported only at Sunteck City, Goregaon (W), even as initial response to the new launch remained low. Collections also remained low at around Rs 91 crore. Sunteck also highlighted YTDFY2017 sales (till Aug 30’2016) reflecting some pick-up post 1QFY17. Sales and collections in July-Aug’16 stand at Rs 2.6 billion and Rs 1.9 billion respectively.
While adopting Ind-AS, Sunteck also shifted to the Percentage of Completion Method (PoCM) from Project Completion Method (PCM) of accounting for revenue recognition. But, unlike peers, it has set higher thresholds. The threshold set by Sunteck is 40% for construction expenditure, 25% for sales achieved and 20% for collections (versus 25% of construction spend, 25% for sales and 10% for collections guideline).
We await clarity on recognition of other major ongoing projects, Sunteck City, Goregaon (W) (launched in 3QFY12) and Signia High. We expect some Joint Venture (JV) projects, for instance Dubai JV, to shift to equity method of accounting.