Thats commendable!!
I asked because I use the data from screener.in, but then realized lately that the ROCE, ROE, Dividend payout % in the downloaded excel sheet do not match the actuals. Would you know a reliable source of getting company data in an excel sheet format?
Can someone please help decipher the Fy17 results announced by Sunteck?
From last yearās presentation deck the consolidated Income for Fy16 was 786 crores and Ebidta of 250 crores:
However in the companyās deck for Fy17 results, the consolidated revenue from last year is showing as 243.4 crores and Ebidta of 4.18 crores. Just trying to figure out what am I missing?
Seems like a classic case of dressing up current numbers in FY16 by saying ārevenue & profits on account of booking XXX project in the P&Lā. I expect management to continue with such shennanigans to boost stock price (look at the share split!), especially as they have an equity raise coming up.
Disc. Used rally to completely exit.
Sunteck changed the method of stating results from Indian GAPP to IND-AS. This might be due to thatā¦pl see India niveshās report page 5 for Sunteckā¦the method of booking results were not comparable
http://www.indianivesh.in//Downloads/636319124485156250_NiveshDaily_-_30_May,_2017.pdf
Please let me know if anybody has ascertained the value of under construction projects or where can i find that information ?
Hi Kashif - my friend who has invested in Sunteck City Avenue 1 just send me this mail:
There is zero progress in 2017 on the project. I paid up for the 20th slab (called in March 2015) after which they went on building till the 34th slab till Dec 2016 (i.e. 21 months for 14 slabs which was much slower than their previous progress when they had gone from Plinth to 20th floor in 28months). To put things in perspective, Avenue 2 and Avenue 1 are at the same height even though Avenue 2 started much later. Also, Lodhaās project nearby is already completed in the sum total time from Sunteckās launch (2010) till today.
Sunteck is known for delay and a lot of the investors who bought in 2010 knew that the project would take 6yrs to complete instead of the 4yrs originally promised. However, today, in 2017 it is obvious that delivery will take another 2 years minimum (at the sales office they promise March 2018).
One story is they are not getting any approvals for the remaining six floors (they plan to build 40 floors). Another story is they are waiting to clear nearby slums. But one thing is for sure, no one knows when Sunteck will complete the project except Mr Khetan.
(end of his mail)
This type of email isnāt anything new, my friend is an end-user and end-users always get a raw deal since builders always favor investors. I donāt know what the scene is for investors though. I also donāt know on what basis Sunteck has booked revenues.
Just passing this as information to you, I have no positions in Sunteck.
Thanks
Anupam
Thanks for this Anupam. After the sharp run up in prices over the last few months, the margin of safety has reduced considerably. This is my cue to exit, i believe.
Donāt you think the best is yet come for the real estate sector. Sector is moving from unorganized to organized sector. Sunteck specifically will have lot of free cash flowā¦that could be used to fund itās upcoming project.I see it to be a multi bagger even from here.understand projects donāt complete on time. There are lot of hurdles to complete a projectā¦ Canāt blindly fault the management. It still has margins of safety as 2500 crores of free cash flow is available. So u r getting the rest of business free of cost. Understand there is 600 crore of debt but then itās not that expensive considering the future growth.
Yes i agree real estate sector has a long way to go and this is just the beginning of the recovery. However, i do not feel too comfortable with the Sunteck position because - 1) I have heard that the promoters do not have a good reputation in the city from fellow investors. Although i have not been able to verify this information. 2) Their execution has lagged behind in other projects as well as the current ones as confirmed by Anupam. This can hurt their reputation and in real estate business reputation counts for a lot.
With the current rally in real estate and the stock market in general, it is no longer a no brainer. Hence i will exit at this stage and wait for a correction to enter a real estate company with better track record of execution and reputation, if Mr. market obliges.
Sunteck might continue on its upward journey but I have lost the conviction.
I understandā¦ I know you have done some estimatesā¦ What would be the conservative sales and net profit that you see for sunteck after 3 uears
RERA enforcement will enforce transparency and accountability requirements for developers, in turn they will increase consumer confidence. Benami Property Act will also has big impact on the way of working for developers. Due to Demon, 2017 is expected to be largely muted for the real estate with increased pressure on prices. Prices are slumping i some cities as everybody seems to be in wait and watch mode as of now OR due to the expectations that real estate prices will fall more due to demon. From longer term perspective real estate market future looks promising.
Sunteck Reality currently has 8 completed projects and 7 ongoing projects. At present they have Rs 43.2bn of inventory, out of which Rs 25bn inventory is in BKC projects,Rs13.2bn inventory in Goregaon project, while all other projects have Rs 5bn of inventory. Future is good for Sunteck.
Thanks Deepakā¦ How is this inventory currently reflected in the financial statementsā¦ Also is this finished inventory.Also from previous thread I understand the accounting policies have changed. So is the expenses for this inventory already recognized or yet to be recognized when the sales happen
Pabrai funds increased holding to 6.72%
Ajay G Piramal now holds 4.27% as per recent Share holding pattern
http://www.bseindia.com/corporates/shpSecurities.aspx?scripcd=512179&qtrid=95.00
investor presentation - http://www.bseindia.com/xml-data/corpfiling/AttachLive/1ef614d0-c727-44fd-9a3b-6011dd5f1ec3.pdf
Disc: bought small tracking Quantity
Ajay Piramal has become shareholder during Apr-Jun qtr from SHP data. Pabrai funds increased holdings by 5% from 1.71% to 6.72%.
But another marquee investor Ashish Dhawan who was shareholder for more than 2 years started reducing his stake of 1.84% from April 17 onwards and has either completely exited or gone down below 1% threshold as on Sept end. (was holding 1.05% as of June end ).
Discl- not invested
thanks for the links! Went though the investor ppt and looks like a decent bet on Mumbai real estate. But it also appears that they have become analyst of their own stock giving explicit projections. some snippets below ā
Well-timed capital allocation ā Stage set for the next round!
Today Sunteckās residential projects have given multi-bagger returns in terms of capital appreciation, significantly outperforming the expectations of even PE players.
Residential portfolio to generate ~Rs24,000mn cash surplus
Overall portfolio 2: Annuity income potential of around Rs4,359 ā 4,825mn by FY2021-22
Disc: No holding
Itās been such a enlightening experience reading your blog on real estate cycles and views of other VPers.
Lately Iāve been reading the AR 2017 of Sunteck Reality and Iāve found these related party transactions little out of order.
āSunteck Lifestyle Limitedā 88.72 Cr this year and total loans outstanding 118.16 Cr and this particular subsidiary share the same office address with 15 other subsidiaries and I wonder if management is siphoning the funds or is it some legit transactions ?
Being a novice in reading financials and investing I cant manage to crack this nut.
Looking forward to your views on this.
Regards
Nitin
Normally real estate companies have subsidiaries for each project they do for accounting ,planning and budgeting purpose hence they could share the same address. So it would be important know what this subsidiary pertains to.What are the reason that you found this little out of the order?
Regards
Karthik
Disc: Invested.
Sunteck had a stupendous day today, perhaps due to this
23-Oct-2017 SUNTECK Sunteck Realty Limited FIDELITY INVESTMENT TRUST FIDELITY EMERGING MARKETS FUND BUY 23,05,280 321.76 -
https://www.nseindia.com/products/content/equities/equities/bulk.htm
Sunteck also changed revenue recognition from project completion to percentage completion method (ar 2017) . Can anyone throw some light on the affect of this change on revenues?
Mohnish Pabrai is aquiring like there is no tomorrow.
