Sunteck Realty Ltd — Investor Presentation 2021

Aug 2, 2021

Sunteck Realty Ltd.

SRL/SE/25/21-22

The Manager, Listing Department

National Stock Exchange of India Ltd Exchange Plaza, Plot no. C/1, G Block, Bandra-Kurla Complex Bandra (East), Mumbai- 400 051 Scrip Code: SUNTECK

Date: 2nd August, 2021

The Secretary, Listing Department, Department of Corporate Services BSE Limited Phiroze Jeejeebhoy Tower, Dalal Street, Mumbai - 400 001 Scrip Code: 512179

Sub: Investor Presentation on Q1FY22 results

Dear Sir / Madam,

Pursuant to Regulation 30(6) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, please find enclosed the Investor Presentation with regard to Unaudited Financial Results for quarter ended 30th June, 2021.

The Investor Presentation shall also be placed on the Company's website.

Kindly take the same on record and disseminate to all the concerned.

Thanking You, For Sunteck Realty Limited

Sunteck Realty Ltd.

Investor Presentation Q1 FY2022

NSE: SUNTECK | BSE: 512179 | Bloomberg: SRIN: IN | Reuters: SUNT.NS / SUNT.BO NSE: SUNTECK | BSE: 512179 | Bloomberg: SRIN: IN | Reuters: SUNT.NS / SUNT.BO

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 management of Sunteck Realty Limited (the "Company" or "Sunteck"), for the sole and exclusive purpose of providing information to the Recipient about the Company and its business, and is not and should be construed to be, directly or indirectly, an offer and / or an invitation and / or a recommendation and / or a solicitation of an offer to buy or sell any securities of the Company in any jurisdiction, nor shall part, or all, of this Presentation form the basis of, or be relied on in connection with, any contract or binding commitment or investment decision in relation to any securities of the Company. No offering of securities of the Company will be made except by means of an offering document containing detailed information about the Company. Securities may not be offered or sold in the United States unless they are registered or exempt from registration requirements under the U.S. Securities Act of 1933, as amended. There will be no offer of securities in the United States.

The distribution of this Presentation in certain jurisdictions may be restricted by law and persons into whose possession this Presentation comes should inform themselves about and observe any such restrictions. This Presentation is strictly confidential and may not be copied, published, distributed or transmitted to any person, in whole or in part, by any medium or in any form for any purpose without the prior written consent of the Company. The information in this Presentation is being provided by the Company solely for the purposes set out herein and is subject to change without notice. Further, this Presentation does not purport to be all-inclusive or necessarily include all the information that the Recipient desires in its evaluation of the Company. The Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.

The audited consolidated financial statements for Fiscals 2016 onwards have been prepared in accordance with Ind AS and the same for prior years have been prepared in accordance with Indian GAAP. This Presentation contains statements which may pertain to future events and expectations and therefore may constitute forward-looking statements. Any statement in this Presentation that is not a statement of historical fact shall be deemed to be a forward-looking statement, and the Recipient agrees that such statements may entail known and unknown risks, uncertainties and other factors which may cause the Company's actual results, levels of activity, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. There can be no assurance that the results and events contemplated by the forward-looking statements contained herein will in fact occur. None of the future projections, expectations, estimates or prospects in this Presentation should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in the Presentation. The Company assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.

The Recipient acknowledges that it shall be solely responsible for its own assessment of the market and the market position of the Company and that it shall conduct its own analysis and be solely responsible for forming its own view of the potential future performance of the business of the Company. The information contained in this Presentation is as of June 30, 2021 except as may be stated otherwise. Neither the delivery of this Presentation nor any further discussions of the Company with any of the Recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since that date. The Company is not under any obligation to update the contents of this Presentation or inform Recipient of any changes in the affairs of the Company. The Company hereby expressly disclaims liability for any errors, inaccuracies, or omissions, and representations and warranties – express or implied, as provided within or in connection with this Presentation. Any clarifications, queries or future communication regarding the matters stated in this Presentation should be addressed to the Company directly. The information given in this Presentation in the form of pictures, artistic renders, areas, consideration, project details etc. should not be construed to be or constitute advertisements, solicitations, marketing, offer for sale, invitation to offer or invitation to acquire.The intention of this Presentation is not to sell or market the unit/s of any of the projects of the Company and is limited to only providing information to Recipient of the Presentation. Certain data and project related numbers are basis operational performance excl. overheads for completed, ongoing and future projects respectively. The revenue recognition is as per IndAS guidelines.

Note The project elevations are for representation purposes only and are the sole property of the Company and may not be reproduced, copied, projected, edited in any way without written permission from the Company.

© 2021 Sunteck Realty Limited, All Rights Reserved.

• Asset-light, Mumbai-based real estate developer with deep expertise and proven execution in delivering projects across the full spectrum of segments, from uber luxury to affordable.
• 38* million square foot portfolio across 19 projects, with projects worth Rs. 70 billion (Rs. 7,000 crores) delivered to date.
• Future growth engines to come from a proven flywheel of JVs and Joint Development Agreements (JDAs) that require limited capital and generate high returns on invested capital.

Our Journey so far…

Sunteck 1.0

Our journey began in 2000 as a Business Center Operator at the then upcoming CBD of Bandra-Kurla Complex (BKC) in Mumbai

Sunteck 2.0

• In the next phase from 2006 onwards, with our differentiated and well-researched view that families would love to live and work in a central business districts such as BKC and premium residential complexes at CBD command 3x-4x premium over the commercial capital values we created enormous shareholder value through our projects Signature Island, Signia Isles, Signia Pearl
• We followed the success of BKC with the next BKC of Mumbai ODC, Goregaon (W) with our differentiated view and acquired ~23 acres of prime land parcel that our peers were ot interested in. The result was the creation of Sunteck City integrated mixed-use development, thereby, leading to enormous shareholder value creation
• Further details on our project can be found in our Intrinsic Value Presentation

Introducing Sunteck 3.0

• These are early days at Sunteck. We have recently embarked on Sunteck 3.0
• The salient aspects of Sunteck 3.0 are:
• 1. Maintain an asset light balance sheet
  • Sell off most of our ~Rs 18 bn (Rs 1,800 cr) of finished inventory in the next 3-4 years
  • Focus on JDAs like Naigaon, Vasai, Vasind and Borivali with low capex requirements
  • Acquire land only if opportunity is extremely compelling
  • Maintain mostly non-recourse, muted debt levels
• 2. Leverage our brand and leading market position to grow the business
• 3. Invest in and incentivize our team

Asset Light Balance Sheet: Releasing Locked Up Capital

• We continue to actively monetize our finished inventory in our Completed Projects, releasing locked up capital.
• Rs 2,995 mn (Rs 300 cr) of inventory monetized through Q1 FY22 since end-FY20.

S.No	Project Name	%age of units sold	No. of units unsold	%age of units unsold	Unsold area (msf)	Estimated unsold revenue potential*
	Completed Projects
1	Signature Island, Isles, Pearl, BKC	82%	39	18%	~ 0.30	~ 17,000
2	Signia Waterfront^, Navi Mumbai	73%	46	27%	~ 0.04	~ 550
3	Others#	97%	4	3%	~ 0.02	~ 160
Total		83%	89	17%	~ 0.36	~ 17,710

All figures are in Rs. Million

* Est. based on current pricing, subject to variances due to changes in business, economic and other variables

^SRL share #Signia High, Borivali and Gilbird Hill, Andheri

Asset Light Balance Sheet: Stack Them High, Let 'em Fly!

Our focus is to maintain high sales velocity on Ongoing Projects.

S.No	Project Name	%age of units sold	No. of units unsold	%age of units unsold	Unsold area (msf)	Estimated unsold revenue potential*
	Ongoing Projects
1	Sunteck City, ODC (1st, 2nd and 4th Avenue)#	64%	606	26%	~ 0.81	~ 11,300
2	Sunteck World, Naigaon (West World and Maxx World)	88%	559	12%	~ 0.26	~ 1,300
3	Commercial Projects (Crest, Icon and BKC 51)**	-	-	-	~ 0.46	~ 650
Total		82%	1,165	18%	~ 1.53	~ 13,250

All figures are in Rs. Million #Sunteck City 1st Avenue has received OC. In 1st Avenue and 2nd Avenue-Nearly 80% inventory is sold. **Sunteck Share (Excl. JDA partner share)

* Est. based on current pricing, subject to variances due to changes in business, economic and other variables

A Proven Flywheel: Near Term Growth Engines

Our near term growth engine is driven by several asset-light JDA models with limited upfront capital.

S.No	Project Name	Unsold area (msf)	Estimated unsold revenue potential*
Upcoming Projects
1	Sunteck City, ODC	~ 3.0	~ 45.0
2	Sunteck World, Naigaon	~ 7.3	~ 27.0
3	Sunteck Vasai	~ 4.5	~ 34.9
4	Sunteck Vasind	~ 2.6	~ 9.3
5	Sunteck Borivali	~ 1.0	~ 13.0
Total		~ 18.4	~ 130

All figures are in Rs. Billion - Sunteck Share (Excl. JDA partner share)

*Subject to variances due to changes in business, economic and other variables

Sunteck Business Summary

• In both the completed as well as ongoing projects category, the company has been able to sell more than 80% of the total inventory available.
• The balance inventory will provide estimated revenue potential of ~ Rs 31 bn (~ Rs 3,100 cr) in the 3-4 years.
• The upcoming and future projects in the middle-income and affordable segment will provide additional revenue potential of ~ Rs 130 bn over various phases to be launched.
• The receivables from the sold inventory of ~ Rs 14 bn (~Rs 1,400 cr) shall be recovered as the projects gets completed.

2021: A Unique Opportunity for Sunteck

• In January 2021, the Maharashtra cabinet approved a 50% reduction in the premium fees paid by developers for ongoing and new projects between August 1 and December 31, 2021
• The savings that Sunteck can realize in 2021 by fast-tracking projects and paying premium fees within the year are significant
• It is a no brainer for Sunteck to take full advantage of the massive savings afforded to it by this unique opportunity.
• As a result, Sunteck will be pre-paying premiums to the tune of ~Rs 2,500 mn (~Rs 250 cr) between October and December 2021. The ROE on these payments is well over 35%. Thus, in 2021 we will be directing our cash towards these payments.

Efficient Use of Capital

• We will use shareholder capital in the most prudent manner possible
• If we have opportunities to deploy capital in high-return projects, we will do so without any reservation.
• The Maharashtra premium reduction in 2021 is a good example of front-loading capital spending to 2021 to maximize savings
• We may also use debt prudently to take full advantage of the 2021 opportunity

Cash Flow Highlights – Q1 FY2022

• Through a combination of inventory monetization and new project pre-sales, Sunteck recorded Rs 1,760 mn (Rs 176 cr) of pre-sales in the quarter, up 74% yoy
• Collections and cash flow are front and center at Sunteck, and our collections to pre-sales efficiency is among industry leading.
• In Q1 FY22, we achieved Rs 1,722 mn (Rs 172 cr) of collections, up 165% yoy and gross cash flows stood at Rs 320 mn (Rs 32 cr)
• Net Debt/Equity is 0.17x, among industry low.

Collections Efficiency at Sunteck

Cash Flow Statement

• Robust collections drives strong operating cash flow in Q1 FY2022.
• Gross cash flow generated from operating activities at Rs 320 mn (Rs 32 cr)

Particulars	Q1 FY22	Q1 FY21
Gross Customer Advances	1,722	651
Less : Cost Incurred	1,017	293
Less : Overheads	224	127
Gross Operating Cash Flow – Surplus / (Deficit)	481	232
Less : Interest Payments	161	208
Gross Cash Flow - Surplus / (Deficit)	320	23

All figures are in Rs. Million *Provisional

P&L (CONSOLIDATED)

• In Q1 FY2022, Revenue from operations grew by 69% yoy to Rs 927 mn (Rs 93 cr) from Rs 550 mn (Rs 55 cr) in Q1 FY2021
• EBITDA and EBITDA Margin for Q1 FY2022 stood at Rs 206 mn (Rs 21 cr), up 32% yoy and 22% respectively
• PAT for Q1 FY2022 stood at Rs 30 mn (Rs 3 cr)
• There is a change in accounting methodology for revenue recognition from Percentage of Completion Method (PoCM) to Project Completion Method (PCM). Pre-sales convert to revenue recognition at project completion.

Particulars	Q1 FY22	Q1 FY21	YoY %	Q4 FY21	FY2021
Revenue from Operations	927	550	69%	1,911	6,139
EBITDA	206	156	32%	353	1,369
Operating Margin	22%	28%		18%	22%
Net Profit	30	-31	NM	104	419

All figures are in Rs. Million

Consolidated Debt Trend

In Q1 FY2022, the consolidated net debt to equity has been reduced significantly to 0.17x.

Consolidated debt trend	FY 2020	FY 2021	Q1 FY22
Secured Debt	7,903	5,969	5,871
Less : Cash & Bank Balance	1,662	991	880
Less : Interest-bearing refundable deposit / loan to JDA partners	475	341	313
Net Secured Debt	5,766	4,637	4,678
Unsecured Debt	392	-	-
Adjusted Net Debt	6,158	4,637	4,678
Networth	27,487	27,724	27,776
Adj. Net Debt / Equity	0.24	0.18	0.17
Add: Quasi-Equity*	912	910	884
Total Adjusted Net Debt	7,070	5,547	5,562
Total Adj. Net Debt / Equity	0.26	0.20	0.20

All figures are in Rs. Million

*With effect from 9th March, 2020, Starlight Systems (I) LLP became a wholly owned subsidiary of SRL pursuant to the retirement of PDL Realty Pvt Ltd (Retired Partner). The Retired Partner's balance of current capital and fixed capital in SSILLP, aggregating to ~910 mn have been converted into a loan. The said loan will be in the form of 1% secured NCDs, which will be redeemed at premium out of the future free cash flow from the specified projects only with a tenure of 20 years.

Appendix

OPERATIONAL PERFORMANCE TREND Strong growth continues

Pre-sales grows by 74% yoy to Rs 176 cr

Collections grows by 165% yoy to Rs 172 cr

Rs million

Operational Data	1QFY21	2QFY21	3QFY21	4QFY21	FY2021 (Full Year)
Pre-Sales	1,012	2,003	3,492	3,710	10,217
Collections	651	1,411	2,525	3,210	7,796

Operational Data	1QFY22
Pre-Sales	1,760
Collections	1,722

COLLECTIONS EFFICIENCY IMPROVING

• Collections/ Pre-sales has been strong at >50% over the previous years.
• In Q1 FY22, the ratio was strong at ~98%.
• Sunteck always endeavors to achieve >50% collections to pre-sales ratio as it leads to efficient cash flow management

Collection Efficiency (Collections / Pre-sales) %

Balance Sheet (Consolidated)

Liabilities	FY21	FY 20	Assets	FY21	FY20
Shareholders Funds	27,724	27,487	Trade Receivables	3,352	3,731
Minority Interest	-	-	Inventories	26,145	27,438
Borrowings	6,879	9,207	Loans & Advances	1,161	1,289
Others	5,934	5,004	Cash & Bank balances	991	1,662
Provisions	35	30	Others	8,925	7,608
Total	40,573	41,728	Total	40,573	41,728

All figures are in Rs. Million

CREDIT RATING UPDATE

The Long-term issuer rating of Sunteck is "AA-" and Short-term issuer rating is "A1+".

AA- / Positive
AA- / Stable

Key Rating Drivers –

• Healthy track record in real estate development in MMR
• Adequate committed cash flow visibility
• Prudent Financial Policies; Strong Credit Metrics
• Prudent cash flow management with adoption of asset light JDA model for new projects
• Price-Point diversity; Locational Advantage
• Low Execution Risk

Sunteck Brand Portfolio

The site pictures of our various ongoing projects are available on the company website.

SUNTECK - ESG PERFORMANCE HIGHLIGHTS

• 'Go Green' CSR campaign
• Digital transformation to reduce resource consumption
• Rainwater harvesting and use of STP water
• Dual fitting tanks and LED lights to reduce energy use

• Fly ash and GGBS, which are waste generated from thermal power plant and steel plant, are used in concrete to reduce waste and make concrete durable

• Support for migrant labourers and frontline workers following the COVID-19 outbreak

• Donation of warm clothes, medicines and food at the Little Sister of the Poor home
• Support for nutrition and health of communities through Project Roshan
• Support for Wadia Hospital's stem cell transplant centre
• Promotion of hand-made, indigenous Diwali products
• Promotion of higher education at Plaksha in Mohali

• Philosophy on code of governance
• Policy framework consisting of Code of Conduct, Whistleblower Policy and CSR Policy
• Disclosures on corporate governance, including committee composition, skills and competencies of directors, directors' remuneration, CSR governance, etc.

Appendix

CORPORATE SOCIAL RESPONSIBILITY

A Vaccination Drive arranged for Sunteck Employees

Appendix

CORPORATE SOCIAL RESPONSIBILITY

Thank You!

Corporate Office

5th Floor, Sunteck Centre, 37 -40 Subhash Road, Vile Parle (East), Mumbai – 400057 Tel: +91 -22 -42877800 Email: ir@sunteckindia.com