Sunteck Realty gets buy rating from Motilal Oswal; why is the stock up 5%?

Sunteck Realty shares rose 5 per cent after its board approved the issuance of convertible warrants through preferential allotment

Shares of Sunteck Realty rose over 5 per cent on Monday after the company's board approved the issuance of 1.18 crore convertible warrants through preferential allotment, raising nearly ₹500 crore. 

 

The real estate developer's stock rose as much as 5.65 per cent during the day to ₹473 per share, a day after surging nearly 19 per cent. The stock pared gains to trade 2.9 per cent higher at ₹460.7 apiece, compared to a 0.27 per cent advance in Nifty 50 as of 11:16 AM. 

 

Shares of the company rose for the second straight session and currently trade at 19 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 9.4 per cent this year, compared to a 5 per cent advance in the benchmark Nifty 50. Sunteck Realty has a total market capitalisation of ₹6,767.80 crore. 

 

Sunteck Realty board clears ₹500 crore warrant issue

The company's board approved the issuance of 1.18 crore convertible warrants through preferential allotment, raising nearly ₹500 crore at an issue price of ₹425 per warrant, the company said in an exchange filing. 

 

The issue will be made to a mix of promoter and non-promoter investors, including Samagra Wealthmax, Glint Infraprojects, Bhuwalka Steel Industries, Utpal Sheth, Mukul Agrawal, BW South Asia and NTAsian Discovery Master Fund. The warrants, each convertible into one equity share, can be exercised within 18 months, with 25 per cent of the issue price payable upfront, the statement said. 

 

In the same meeting, the board appointed architect Ajeet Singh as additional and whole-time director for five years, effective 5 September 2025, pending shareholder approval.

Sunteck Realty Q1 results 

The company posted a 46.8 per cent rise in net profit to ₹33.43 crore in Q1 FY26, even as revenue from operations fell 40.5 per cent year-on-year (Y-o-Y) to ₹188.32 crore. Ebitda rose 54.8 per cent to ₹48 crore, with margins expanding 1,541 basis points to 25 per cent. Collections improved 2.6 per cent to ₹351 crore from ₹342 crore a year earlier.

 

Sunteck Realty is one of India's leading luxury real estate developers, known for its financial prudence, low leverage, and sustainable growth. The company boasts a city-centric development portfolio of approximately 52.5 million square feet across 32 projects.

 

Motilal Oswal on Suntech Realty

In a report on August 21, Motilal Oswal said that the company is on an acquisition drive aimed at doubling its gross development value every three years, supported by healthy cash flows. The company follows an asset-light model to keep its balance sheet lean while accelerating execution, with in-house construction management ensuring control over pace and quality, it said. 

 

Backed by a strong launch pipeline, presales are projected to grow at a 24 per cent CAGR over FY25-27, while collections and operating cash flow are expected to post 57 per cent and 79 per cent CAGRs, respectively. The brokerage reiterated its 'Buy' rating with a target price of ₹561 per share.