Sunteck Realty says completion of Bandra Kurla Complex projects likely on time

MUMBAI: City-based Sunteck Realty has healthy financials as compared to its other real estate peers. The company has a very light balance sheet (debt -equity is 0.7) and mainly operates in Mumbai region, which is a high price high margin market. These factors make the company attractive from the investment point of view.

Besides this, the company's strong partnership with Ajay Piramal group and conservative accounting practice makes it more attractive from the investment point of view. The company recognizes revenue only once the project is complete and not when the sales are done.

80% of the company's net asset value is from its Mumbai projects and amongst Mumbai projects, its Bandra Kurla Complex commercial projects - Signature Island and Signia Isles only is equal to almost 50% of the company's total net asset value. This project is likely to be completed by March 2013 as compared to September 2012. Once the project is complete, the sales recognition from this project will boost the company's FY14 earnings.

At the current market price of Rs 315, the company's stock is trading at a 50% discount to its FY13 net asset value. Considering the company's strong execution record, the valuation is quite cheap.