Prabhudas Lilladher Reiterates BUY on Sunteck Realty with ₹520 Target Price, Projects 25% Pre-Sales CAGR Over FY26–28

Prabhudas Lilladher Reiterates BUY on Sunteck Realty Following Strong FY26 Results

On April 27, 2026, brokerage Prabhudas Lilladher reiterated a BUY rating on Sunteck Realty, setting a target price of ₹520 per share following the completion of Q4 FY26 results. The call reflects strong operational performance and optimism about the company's medium-term growth trajectory.

FY26 Financial Performance

Consolidated revenue for FY26 increased 32% year-on-year to ₹11.2 billion, largely driven by revenue recognition from the ODC 4th Avenue project. EBITDA rose sharply by 64% year-on-year to ₹3.0 billion, with margins expanding to 27.1%, up approximately 530 basis points.

Sunteck generated ₹5.5 billion in net cash flow surplus during FY26, a 48% year-on-year increase, reinforcing its ability to fund expansion without excessive leverage.

Pre-sales momentum remained intact throughout the year. Ultra-luxury projects contributed nearly 49% of total pre-sales, while mid-income housing segments accounted for 42%, ensuring a diversified revenue mix. Quarterly collections surged 39% year-on-year to ₹4.3 billion in Q4, while annual collections rose 14% to ₹14.3 billion, underscoring improving cash conversion and execution capabilities.

Growth Outlook: 25% Pre-Sales CAGR Through FY28

Pre-sales are expected to grow at a compound annual growth rate of approximately 25% over FY26–FY28, supported by aggressive launches and improving realizations. This guidance is anchored in a substantial project pipeline.

Sunteck is aggressively expanding its project pipeline. During FY26, the company deployed ₹8.1 billion toward business development and capex, significantly higher than the previous year, with the total gross development value (GDV) of newly added projects standing at approximately ₹50 billion, including developments in Andheri and Mira Road.

Looking ahead, FY27 is expected to be a landmark year for launches, with management guided for ₹60–70 billion worth of project launches, including multiple residential towers and redevelopment projects.

Portfolio Composition and Market Positioning

The company's diversified portfolio continues to drive resilience. Ultra-luxury projects generated ₹15.38 billion in pre-sales, while mid-income housing contributed ₹13.17 billion. This bifurcated approach positions Sunteck across multiple segments of Mumbai's residential market.

The ultra-luxury focus reflects the company's track record in premium micro-markets. Sunteck has been a trendsetter in creating iconic destinations such as the flagship project, Signature Island at Bandra Kurla Complex (BKC), Sunteck City in Oshiwara District Centre (ODC), Goregaon and SunteckWorld at Naigaon.

Key Catalysts Identified by Prabhudas Lilladher

The brokerage highlighted several near-term drivers for growth:

• Revenue recognition from the Naigaon project in FY27, expansion of the ultra-luxury portfolio, and launch of international projects (Dubai JV).
• Management anticipates stronger collections in FY27 and FY28 as under-construction inventory transitions into completed units.
• The much-anticipated Dubai joint venture project is nearing launch readiness, pending geopolitical stabilization—a potential medium-term catalyst.

Valuation and Investment Thesis

Based on NAV methodology, the company's NAV per share stands at ₹520, which aligns with the revised target price. At the current market price of ₹356, the stock offers a compelling risk-reward profile.

With improving realizations, disciplined capital allocation, and a strong ultra-luxury portfolio, Prabhudas Lilladher reiterates a BUY rating, assigning a target price of ₹520, implying meaningful upside from current levels.

With earnings expected to grow sharply (EPS projected at ₹21.8 in FY27 and ₹27.7 in FY28), and valuation multiples compressing meaningfully, the stock presents an attractive opportunity for medium-term investors.

Financial Discipline and Balance Sheet Strength

The company maintained low net debt (0.06x) and expanded its portfolio by approximately ₹50 billion GDV. This conservative leverage posture provides flexibility for continued land acquisitions and project launches without diluting shareholder equity.

The company's demonstrated ability to generate strong cash flows, combined with selective project additions in high-value micro-markets, underpins confidence in sustained pre-sales growth and margin expansion over the forecast period.