Real Estate Stocks: Top Picks Amid Rising Consolidation and Healthy Demand
Housing demand in India's top 7 cities improved 28% year-on-year
Real EstateStocksHousing DemandNuvama EquitiesDlfPrestige Estates ProjectsBrigade EnterprisesReal EstateMay 27, 2024
Unsold inventory continued to improve as it declined 7% YoY with inventory months falling to 15 in April from 19 in the same month last year. Moreover, the correction in unsold inventory levels has lifted prices in all the major cities. Average home prices surged YoY in all top 7 cities during the month.
With the Reserve Bank of India (RBI) pausing rate hikes and real estate developers ramping up business development, Nuvama Institutional Equities believes the sales momentum would improve, particularly for organised developers. Over the medium to long-term, the brokerage anticipates the consolidation in favour of organised developers to gather steam.
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.
It expects launches to remain contained due to liquidity constraints. With valuations remaining comfortable on a relative basis, the brokerage firm argues it is a good opportunity to enter realty stocks. Nuvama Equities believes realty stocks are attractive from a medium-term perspective in light of rising consolidation.
Its top picks in the sector include DLF, Prestige Estates Projects and Brigade Enterprises. The brokerage firm has a ‘Buy’ rating on these stocks.
Nuvama Institutional Equities is a leading brokerage firm in India, known for its comprehensive research and analysis on various sectors, including real estate. The firm's reports and recommendations are widely followed by investors and market participants.
DLF is a leading real estate developer in India, with a presence in residential, commercial, and retail segments. Prestige Estates Projects is another prominent developer, known for its high-end residential and commercial projects. Brigade Enterprises is a diversified real estate company, with interests in residential, commercial, and hospitality segments.
Frequently Asked Questions
What is the current trend in housing demand in India? A: Housing demand in India's top 7 cities improved 28% year-on-year (YoY) in April 2024 Q: Which real estate 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 Nuvama Equities' view on realty stocks? A: Nuvama Equities believes realty stocks are attractive from a medium-term perspective in light of rising consolidation Q: What are Nuvama Equities' top picks in the real estate sector? A: DLF Prestige Estates Projects and Brigade Enterprises are Nuvama Equities' top picks in the sector Q: Why are investors gaining confidence in realty stocks? A: Investors are gaining confidence in realty stocks due to the uptick in the housing space and the comfort on the debt reduction front
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