Stock Alert Shriram Properties Ltd-BUY

Shriram Properties Ltd-BUY

Target (Rs) Upside % CMP Investment Horizon:
₹ 121
One year

Shriram Properties Ltd. (SPL), focuses on making homes in South India that are affordable and also has projects in other areas like luxury houses and office spaces. They are good at working with different business models and have completed 36 projects in over 20 years. SPL works in five big cities: Bengaluru, Kolkata, Chennai, Vizag, and Coimbatore. By September 30, 2023, they have plans for 42 projects covering a huge area, with 24 projects ongoing and 18 planned for the future. They make money from these projects and have reduced their debts. SPL has also teamed up with ASK Property Fund, bringing in a lot of money to work with.

Why is SPL a Good Choice for Investment?

  • Strong Performance: They have finished 36 projects well and on time. In one year, they completed seven projects, handing over 2,000 homes/plots.
  • Many Projects in Progress: They have a lot of ongoing projects, covering a big area.
  • Asset-Light Model: SPL makes projects for other builders and gets paid a percentage of the sales. This strategy means they can make more money without needing a lot of capital.
  • Good Future Plans: They have new projects coming, like Shriram 122 West, and are gaining more from Shriram Park63.
  • Balanced Business Model: They mix real estate development with providing services, which is financially smarter.

Looking Ahead:

Despite challenges like higher loan rates and global inflation, India’s housing market is still strong because of factors like more people wanting to own homes, higher incomes, more nuclear families, and more people moving to cities. The affordable housing sector is doing particularly well. SPL manages its money wisely and has shifted from relying on non-banking financial companies to banks, reducing their loan costs. With their strong sales and project execution, presence in major cities, and financial stability, SPL is expected to grow, especially in the second half of the financial year. Therefore, it’s recommended to buy SPL stock, expecting a 15% increase in its price in 12 months.

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