Real Estate Stocks Look Attractive Amid Rising Consolidation and Healthy Demand
Organised developers are witnessing an improvement in their cash flow generation post-COVID
Real EstateMarketConsolidationDemandDlfPrestige Estates ProjectsBrigade EnterprisesReal Estate NewsMay 27, 2024
With the Reserve Bank of India (RBI) pausing rate hikes and real estate developers ramping up business development, sales momentum is expected to improve, particularly for organised developers. Nuvama Institutional Equities believes that the consolidation in favour of organised developers will gather steam over the medium to long-term.
The brokerage firm expects developers with strong balance sheets and established brands to benefit from the uptick in the housing space, along with the comfort on the debt reduction front. This has led to the strengthening of launch pipelines and spurred pre-sales growth.
Organised developers are witnessing an improvement in their cash flow generation post-COVID, which shall help them gain market share. Developers with robust balance sheets shall also benefit from attractive business development opportunities. Overall, the brokerage reckons stronger players would gain market share, going ahead.
The brokerage firm has a ‘Buy’ rating on DLF, Prestige Estates Projects, and Brigade Enterprises, citing their attractive valuations and sizeable land banks.
Nuvama Institutional Equities is a leading brokerage firm that provides research and analysis on various sectors, including real estate.
DLF is a leading real estate developer in India, known for its luxury residential projects. Prestige Estates Projects is another prominent developer with a strong presence in the southern states. Brigade Enterprises is a Bengaluru-based developer with a focus on residential and commercial projects.
Frequently Asked Questions
What is the current trend in the Indian real estate sector? A: The sector is witnessing a significant improvement in demand with housing sales increasing by 28% year-on-year (YoY) in April 2024 Q: Which developers are expected to gain market share? A: Organised developers with strong balance sheets and established brands are expected to gain market share Q: What is driving the sales momentum in the real estate sector? A: The pause in rate hikes by the RBI and the ramping up of business development by real estate developers are driving the sales momentum Q: What is Nuvama Institutional Equities' outlook on the real estate sector? A: The brokerage firm believes that realty stocks are attractive from a medium-term perspective in light of rising consolidation Q: Which stocks have a ‘Buy’ rating from Nuvama Institutional Equities? A: DLF Prestige Estates Projects and Brigade Enterprises have a ‘Buy’ rating from the brokerage firm
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