Sunteck Realty Limited · NSE:SUNTECK
Sunteck Realty — Q1 FY2023 Earnings Presentation
52 slides from Sunteck Realty's earnings presentation, Aug 11, 2022
Slide 1: Exchange filing cover letter for Investor Presentation
Sunteck Realty Ltd. Sunteck Date: 11 th August, 2022 SRL/SE/ 2~ /22-23 National Stock Exchange of India Ltd BSE Limited Exchange Plaza, Plot no. C/ 1, G Block, Phiroze Jeejeebhoy Tower, Bandra-Kurla Complex, Bandra (East), Dalal Street, Mumbai- 400 051 Mumbai -400 001 Symbol: SUNTECK Scrip Code: 512
Slide 2: Sunteck Realty Limited Investor Presentation Q1 FY2023
Sunteck Realty Limited Investor Presentation Q1 FY2023 NSE: SUNTECK | BSE: 512179 | Bloomberg: SRIN: IN | Reuters: SUNT.NS / SUNT.BO
Slide 3: Disclaimer
Disclaimer By attending the meeting where this presentation is made and any additional material is provided (“Presentation”) or by reading the Presentation, you (“Recipient”), agree to be bound by the following limitations. This Presentation has been prepared on the basis of the estimates of the man
Slide 4: Agenda
Agenda ▷ Who are we ▷ What have we achieved ▷ What we aspire for ▷ Key Numbers ▷ Risk Factors ▷ Industry Insights ▷ Awards ▷ Summary 3
Slide 5: Who are we
Who are we 4
Slide 6: Executive Summary
Executive Summary ▷ NSE and BSE listed organization with development focus in the Mumbai Metropolitan Region (MMR) market. ▷ One of the largest developer in the Western Suburbs of MMR from Bandra to Virar. ▷ Delivered projects worth > US$ 1 bn (~Rs 9,000 cr) GDV till date. ▷ Presently have ~50* mn s
Slide 7: Mumbai (MMR) presence
Mumbai (MMR) presence One of the largest developer on Western suburbs with ~18.1 mn sq ft of balance development Expanded to Eastern suburbs with ~12.1 mn sq ft of balance development By Project Brands By Location Volume ~5 msf ~12 msf Eastern Western Eastern Suburbs Suburbs Suburbs ~2.6 msf Western
Slide 8: Company Overview
Company Overview Real Estate Developer with 2 Decades of Experience MMR-focus residential play and pivot from high-end luxury segment towards mid-income & affordable segment Luxury Mid-income Affordable Across segments (Aspirational luxury) BKC, Borivali E, ODC, Borivali W, Vasai W, BKC Airoli Goreg
Slide 9: Our Brands
Our Brands Premium positioning by creating different luxury brands across all the segments Presence across the pricing spectrum from uber-luxury to affordable 8
Slide 10: Our Partnerships
Our Partnerships Partnership with Ajay Piramal Group - India REIT private equity invested at Signature Island in 2006 and exited at >20% IRRs within ~3 years - 50:50 JV - Piramal Sunteck Realty Pvt. Ltd. (PSRPL) formed in 2007 to undertaken multiple projects Partnership with Kotak Group - Kotak Real
Slide 11: Board of Directors
Board of Directors 200+ years of combined experience across real estate, banking & finance, law & compliance Kamal Khetan Atul Poopal V P Shetty Mukesh Jain Rachana Hingrajia Chaitanya Dalal Sandhya Malhotra CMD Executive Director Ind. Director Ind. Director Director Ind. Director Ind. Director - 1s
Slide 12: Shareholding Pattern
Shareholding Pattern June-2022 Others, 8.1% FIIs & DIIs, 24.8% Promoters, 67.1% *Nil shares are pledged ▷ Market Cap - ~Rs. 7,257.33 crore / ~ US$ 930.43 million (8th August, 2022) US$ 1 = ~Rs 78 11
Slide 13: What have we achieved
What have we achieved 12
Slide 14: Well-timed Capital Allocation
Well-timed Capital Allocation ~36 mn sq ft of projects acquired since 2018 Of which, ~23 mn sq ft acquired since the onset of COVID-19 pandemic Net Debt/Equity @0.18x at the end of Q1 FY23 highlights fiscal discipline Strong land acquisition track-record, post- Lehmann crisis years (peak recession)
Slide 15: Net Debt/Equity discipline
Net Debt/Equity discipline ▷ Despite acquisitions of 36 mn sq ft since 2018, the leverage discipline has been maintained ▷ No compromise on financial prudence and fiscal discipline 2.00x 1.80x 1.60x 1.40x ➢ ~36 mn sq ft of projects acquired since 2018 1.20x 1.04x ➢ Of which, ~23 mn sq ft has been 1.
Slide 16: Equity fund raising done judiciously
Equity fund raising done judiciously ▷ Sunteck has raised external equity twice through QIP in 2009 (~Rs 150 cr) and 2017 (~Rs 500 cr) ▷ Since 2007, cumulative equity fund raising account for ~28% of FY22 Networth Networth break-up Equity fund raising - QIP & Others 28% Reserves & Surplus 72% 15
Slide 17: Completed Projects
Completed Projects 14 (residential+commercial) projects delivered worth ~Rs 9,000 crore (~US$ 1.2 bn) Signature Island, BKC Signia Isles, BKC Signia Pearl, BKC Signia High, Borivali E Signia Oceans, Airoli Signia Skys, Nagpur Sig. Waterfront, Airoli Gilbird Hill, Andheri W S. City Avenue 1, ODC S. C
Slide 18: Completed Commercial Projects
Completed Commercial Projects Sunteck Kanaka, Goa Sunteck Center, Vile Parle E Sunteck Grandeur, Andheri E
Slide 19: Completed Projects – Residential
Completed Projects – Residential ~2 mn sq ft completed in Q1 FY23
Slide 20: Ongoing Projects - Residential
Ongoing Projects - Residential ~4 mn sq ft of execution underway across segments
Slide 21: Ongoing Projects - Commercial
Ongoing Projects - Commercial ~4 mn sq ft of execution underway across segments Sunteck BKC 51, BKC Jn. Sunteck Icon, BKC Jn. Sunteck Crest, Andheri E Pinnacle, ODC
Slide 22: Key Performance Highlights (FY18 - FY22)
Key Performance Highlights (FY18 - FY22) Delivering sustainable operational growth and operating margins Average Pre-sales Collections EBITDA CAGR CAGR Margin (18-22) (18-22) (18-22) ~22.03% ~18.68% ~33.51% *Company follows project completion method of accounting Rs 1 cr = Rs 10 mn 21
Slide 23: Operational Performance Trend
Operational Performance Trend Pre-sales mix & Collections efficiency ▷ Pre-sales mix has pivoted from Luxury to Mid-Income and Affordable segment. ▷ Collections Efficiency has improved to 81% in FY22 against 76% in FY21. In Q1 FY23, CE stands at 86%. Healthy Pre-sales mix Collections efficiency (Col
Slide 24: ESG Performance Highlights
ESG Performance Highlights Environmental Social Governance ▪ ‘Go Green’ CSR campaign ▪ Support for migrant labourers and ▪ Philosophy on code of governance ▪ Digital transformation to reduce frontline workers following the ▪ Policy framework consisting of resource consumption COVID-19 outbreak Code
Slide 25: What we aspire for
What we aspire for 24
Slide 26: Embarking on Sunteck 3.0
Embarking on Sunteck 3.0 ▷ Sunteck 1.0 journey was initiated as a Business Center Operator in 2000 and after 6 years with the acquisition of the Signature Island, BKC – under Sunteck 2.0 – the company grew into a pure play RE developer with projects in BKC and ODC, Goregaon W. ▷ The salient aspects
Slide 27: Existing Growth Engines of Sunteck 3.0
Existing Growth Engines of Sunteck 3.0 Sunteck’s strategy is to enter markets underpenetrated by organized players and bet big to realize attractive returns 2006 ➢ Residences tapped back in 2006-2009, when looked as CBD BKC ➢ Took huge bet and developed Uber luxury apartments via Signature Island ➢
Slide 28: Future Growth Engines of Sunteck 3.0
Future Growth Engines of Sunteck 3.0 The launch and execution of these new growth engines will scale up the sales engine of Sunteck 2020 ➢ ~50 acres acquired with a development potential of ~5 mn sq ft Vasai W ➢ Est. GDV of ~Rs 5,000 crores in the coming 6-7 years ➢ Tap big demand potential of hithe
Slide 29: Development Potential & Launch Timelines
Development Potential & Launch Timelines ▷ Est. Gross Sales Visibility of ~Rs. 28,600 (~US$ 3.7 bn) crores from the 6 (six) growth engines Estimated Already Balance Beyond Projects Project Size Sales FY22-23 E FY23-24 E Launched Potential FY24 E Visibility (~ mn sq ft) (~ mn sq ft) (~ mn sq ft) (~ R
Slide 30: The 'Sunteck' approach to 'Continuous Growth'
The ‘Sunteck’ approach to ‘Continuous Growth’ ❑ ~23 msf acquired since the onset of ❑ Estimated GDV of acquisitions is ~Rs. the COVID-19 pandemic. 28,600 cr (~US$ 3.7 bn). ❑ In the last 3 years, the company has ❑ The monetization of these projects acquired ~36 msf. will lead to continuous growth in
Slide 31: ~US$ 3.7 billion, ~36 million sq ft, ~0.18x
~US$ 3.7 billion Est. Gross Development Value (GDV) of upcoming project pipeline ~36 million sq ft Across 6 projects at BKC, ODC, Naigaon, Vasai West, Kalyan- Vasind, and Borivali West in MMR ~0.18x One of the lowest Net Debt/Equity ratio across the sector US$ 1 = Rs 78 30
Slide 32: Pre-sales growth multiple to improve
Pre-sales growth multiple to improve On the back of new project launches ▷ The phase-wise launch of new projects at Vasai West, Kalyan-Vasind, Borivali West and new phases of existing projects such as Sunteck City ODC and Sunteck World Naigaon could be a tailwind for sales growth. 25 1,800 20 15 1,0
Slide 33: Key Numbers
Key Numbers Operational Performance and Financial Statements 32
Slide 34: Operational Snapshot
Operational Snapshot FY22 FY22 Pre-sales Collections (~Rs cr) (~Rs cr) 1,303 1,053 Q1 FY23 Q1 FY23 Pre-sales Collections (~Rs cr) (~Rs cr) 333 285 Rs 1 cr = Rs 10 mn
Slide 35: Operational Performance Trend (Quarter-wise)
Operational Performance Trend (Quarter-wise) Both pre-sales and collections are GROWING STRONGLY on a sequential (quarterly) as well as yearly basis Pre-sales (~Rs cr) Collections (~Rs cr) 600 500 503 404 500 400 371 321 400 333 349 352 285 300 253270 300 272 207 200 200 172 176 141 200 101 65 100 1
Slide 36: Operational Performance (Pre-sales Segment-wise)
Operational Performance (Pre-sales Segment-wise) The pre-sales mix for the quarter is dominated by the mid-income segment contributing 78% of the total bookings. Sunteck Beach Residences (SBR) at Vasai (W) was launched in the first-quarter. Q1 FY23 Mix Segment Brands (~Rs cr) (%) Mid-income Sunteck
Slide 37: Operational Performance (Collections Segment-wise)
Operational Performance (Collections Segment-wise) The collections mix for the quarter is broad-based with all segments performing well. Q1 FY23 Mix Segment Brands (~Rs cr) (%) Luxury Signature, Signia 84 29% Mid-income Sunteck City, SBR 74 26% Aspirational Sunteck World 116 41% Commercial Sunteck 1
Slide 38: Robust operational cash flows
Robust operational cash flows ~ Rs 600 cr operating surplus generated in 2+ years – used in Buss. Dev., debt reduction and adv. premium payment ~Rs 74 cr of operating cash flow surplus generated in Q1 FY2023. Particulars FY 2021 FY2022 Q1 FY2023# OPERATING CASH FLOW Total Operating Cash Flow Surplus
Slide 39: Strong Balance Sheet
Strong Balance Sheet In FY22, the consolidated net debt to equity has been strong at 0.18x. Particulars Q1 FY23 Total Debt 621 Less: Cash & Bank Balance 79 Less: Loans to JDA partners 43 Net Debt 499 Net Worth 2,794 Net Debt / Equity 0.18x Quasi-Equity and Others* 91 Adjusted Net Debt 590 Adj. Net D
Slide 40: Key Financials
Key Financials ▷ In Q1 FY23, Revenue from operations stood at Rs 144 cr (Rs 1,435 mn) against Rs 93 cr (Rs 927 mn) for Q1 FY22 ▷ EBITDA for Q1 FY23 stood at Rs 45 cr (Rs 452 mn) against Rs 21 cr (Rs 206 mn) for Q1 FY22 ▷ EBITDA margin stood at 32% for Q1 FY23 against 22% in Q1 FY22 Particulars Q1 FY
Slide 41: Key Financials
Key Financials BALANCE SHEET – FY22 (Consol) Liabilities Rs Cr Assets Rs Cr Networth 2,790 Receivables 271 MI - Inventories 4,042 Borrowings 787 L&A 113 Others 1,917 Cash & Bank 97 Provisions 5 Others 976 Total 5,499 Total 5,499 Rs 1 cr = Rs 10 mn 40
Slide 42: Superior Credit Rating
Superior Credit Rating ▷ Sunteck has Top Tier Credit Profile which is a Testimonial for its Strong Fundamentals. AA- / Positive AA- / Stable ▷ Key Rating drivers are – ○ Healthy track record in real estate development in MMR ○ Adequate committed cash flow visibility ○ Prudent Financial Policies; Str
Slide 43: Risk Factors
Risk Factors 42
Slide 44: Risk Factors
Risk Factors ▷ Impact of COVID-19 pandemic on overall economy and real estate sector in particular is still being quantified and uncertain. ▷ Exposure to cyclicality in real estate business – the residential real estate sector have been adversely impacted by liquidity crunch, high inventory and subd
Slide 45: Industry Insights
Industry Insights 44
Slide 46: Improved Affordability
Improved Affordability ▷ Rise in income-levels and favourable demographics (66% of Indian population is less than 35 years of age) has led to best affordability in the last 25 years. ▷ MMR affordability has improved the most in the last 10 years since 2011. (Affordability = EMI/Income) Source: HDFC
Slide 47: Rising Urbanisation
Rising Urbanisation ▷ By 2030, almost 40% of the population is expected to be living in urban centers. 35% 31% 32% 30% 28% 26% 25% 23% 20% 20% 18% 17% 15% 10% 5% 0% 1951 1961 1971 1981 1991 2001 2011 2017 Urbanisation Trend 46 Source: ADB, Census 2011, Knight Frank Research data
Slide 48: MMR Dominates the Residential Real Estate Market in India
MMR Dominates the Residential Real Estate Market in India ▷ MMR both in terms of pricing and units sold is the largest micro-market in India. The average pricing at Rs6,787 per square feet is higher than other cities ▷ Over the past 5 years, the pricing in MMR has remained stable 60,000 MMR 6,787 MM
Slide 49: Home loan rates are benign
Home loan rates are benign ▷ Housing loan rates are at decadal lows, thereby improving affordability and savings on EMI. ▷ Average of last 13 years is ~9.2%. 11.0% 10.0%10.0% 10.1%10.2% 9.9% 9.5% 8.9% 8.7% 8.6% 8.6% 7.5% 7.0% 6.5% FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 Q1 F
Slide 50: Awards
Awards 49
Slide 51: Awards
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Slide 52: Thank You
Thank You ir@sunteckindia.com 51