Shares of Suraj Estate Developers hit a record high of Rs 629, surging 9% on the BSE in Thursday’s intra-day trade after the company announced it entered into a definitive sale agreement with the Clearing Corporation of India. This agreement involves the sale of an additional area on the 7th, 8th, and 9th floors to be constructed over the existing CCIL Bhavan building in Dadar, Mumbai. According to the company’s exchange filing, the sale encompasses approximately 22,410 square feet of carpet area, valued at around Rs 89.78 crore.
Suraj Estate Developers has a strong presence in the South Central Mumbai market, with a residential portfolio in Mahim, Dadar, Prabhadevi, and Parel. These are key submarkets where the company has established its reputation.
Suraj Estate focuses primarily on value luxury, luxury segments, and commercial real estate. Additionally, the company is expanding into residential real estate development in the Bandra sub-market. This strategic move signifies its intent to broaden its market presence and cater to the growing demand for premium housing in Mumbai.
Since its market debut on December 26, 2023, Suraj Estate’s stock has shown remarkable performance. Over the past week, the stock price soared by 34%, and in the last month, it has zoomed 101%. Currently, the stock is quoted 75% higher than its issue price of Rs 360 per share. This robust growth reflects investor confidence in the company’s strategic initiatives and its ability to capitalize on market opportunities.
In recent developments, Suraj Estate achieved an amicable resolution of a longstanding litigation, unlocking a sales potential of Rs 350 crore. This resolution, announced during the March quarter (Q4FY24) results on May 7, marks a significant milestone for the company and reinforces its commitment to excellence in the real estate sector. Furthermore, the projected redevelopment of five buildings is expected to generate an additional Rs 225 crore, further enhancing the company’s financial outlook.
Brokerage firm Nuvama Wealth and Investment initiated coverage on Suraj Estate with a ‘BUY’ rating and a target price of Rs 757, valuing the stock at 1.4 times its FY26E Net Asset Value (NAV). Nuvama’s confidence in Suraj Estate’s long-term growth is driven by the company’s strong redevelopment capabilities, healthy development pipeline, and well-located land bank. The brokerage firm’s optimism is also supported by a structurally buoyant home market, which bodes well for the company’s future prospects.
Suraj Estate currently has 13 ongoing and 18 upcoming projects, with an inventory/saleable area of 0.12 million square feet and 0.9 million square feet, respectively. The gross development value (GDV) of these projects is approximately Rs 631 crore and Rs 5,200 crore. The company also has land reserves of around 2.6 acres for future development. Nuvama expects the entire GDV of approximately Rs 5,831 crore to be liquidated by FY32, resulting in a cash surplus of around Rs 3,579 crore from ongoing and upcoming projects.
The brokerage firm anticipates new project additions once Suraj Estate launches most of its existing projects. Analysts at Nuvama value Suraj Estate at a 40% premium to its FY26E NAV, considering its land reserves and the company’s ability to aggressively add new projects within its existing micro-market, given its brand value and improved balance sheet.
