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Suraj Estate Developers Ltd

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This stock appeared on my stock screener, but I couldn’t find any forum here. Therefore, I’m starting a discussion here.

About The Company

  • A real estate construction company that develops residential and commercial real estate in the South Central Mumbai region.
  • Asset-light business model focusing primarily on redevelopment projects, which saves significantly on upfront land acquisition costs.
  • The company has an established brand with a long-standing presence in the Value Luxury Segment and Luxury Segment of the residential real estate market.
  • The company was promoted by Rajan Meenathakonil Thomas. Currently, the promoters hold 74.95%.

Positives

  • Presence in the fast-growing and less price-sensitive luxury real estate segment.
  • MMR is one of the fastest-growing realty markets.
  • Focused on asset-light redevelopment projects, providing access to land parcels at cheaper costs, resulting in high ROCE and ROE numbers.
  • High EBITDA margins due to access to cheaper land parcels and a focus on luxury projects.
  • Good reported numbers in terms of sales and PAT growth, with very attractive ROCE and ROE numbers.
  • Experienced promoters and management team.
  • Good track record of tenant resettlement and compliance with redevelopment norms.
  • Investment from an institutional investor - Tata Housing Opportunity Fund.

Risks

  • High cost of interest on debt.
  • Leveraged balance sheet.
  • High concentration in the South Central Mumbai region.
  • Susceptible to real estate cycles.

Ratings Although reviews don’t tell the complete story, I am including them as they indicate how different stakeholders are satisfied/dissatisfied with the company. Keep in mind that they can be easily manipulated.

  • Glassdoor - 3.8/5
  • Google My Business - 3.5/5
  • Justdial - 4.0/5

Research Reports

Disclaimer Not invested but actively tracking - The stock is recently listed and has a leveraged balance sheet. Therefore, I am actively researching it and waiting for more quarterly results and commentary from management, as well as valuation comfort.

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