Sunteck Realty Shares Climb Highest In Over A Year As Jefferies Raises Target
Jefferies estimates that sales could rise by over 25% year-on-year to nearly Rs 2,000 crore for fiscal 2024.
Shares of Sunteck Realty Ltd. surged nearly 7% to a more than 52-week high on Wednesday after Jefferies raised its target price.
The brokerage raised the target price to Rs 555 from an earlier Rs 415, implying an upside of 28%. It maintained a 'buy' rating on the stock in an Oct. 10 note.
The company announced a joint platform with International Finance Corp. for affordable and mid-income housing for a total investment of Rs 750 crore, with IFC to invest up to Rs 330 crore.
It aims to develop nearly 12,000 housing units across four to six green housing projects in the Mumbai Metropolitan Region.
The investment will provide a significant push to its growth potential over the medium to long term, the brokerage said.
Jefferies expects a reintroduction of the interest subsidy component of the popular Housing for All (Urban) scheme by the Indian government, given the upcoming general election in 2024.
It expects the scheme to boost affordability and the eligibility pool of home loan customers, with the rollout likely taking place in the fourth quarter of the current calendar year.
The scheme, which has been discontinued since March 2022, provided about a 3-6.5% interest subsidy for affordable and mid-income housing, along with a reduction in the principal amount by around Rs 2.5 lakh, it said.
"The share of affordable and mid-income housing segments has declined by 8 percentage points to 28% over the last 4 years," Jefferies said, even as overall housing sales have doubled in the MMR region since pre-Covid lows. "An affordability boost from the government should help the segment recover."
Jefferies estimates that sales could rise by over 25% year-on-year to nearly Rs 2,000 crore for fiscal 2024, factoring in the new launches during the second half of the current fiscal.
It supports its belief with the positive performance of the previous launch at Mira Road in March 2023.
Shares of Sunteck Realty rose as much as 6.97%, the highest since Sept. 2, 2022, before paring gain to trade 3.37% higher at 10:24 a.m. This compares to a 0.62% rise in the NSE Nifty 50.
The stock has risen 42.36% in the year-to-date, compared to 42.31% rise in Nifty Realty during this period. The average traded volume so far in the day stood at 2.92 times its monthly average. While the relative strength index was at 72, indicating the stock may be overbought.
All 11 analysts tracking the company maintain a 'buy' rating, according to Bloomberg data. The average 12-month consensus price target implies a potential upside of 8.2%.