Shares of realty companies surged today, with the BSE Realty Index hitting a 10-year high.
Construction activities have picked up pace with states easing lockdown curbs amid a steady fall in covid cases.
The realty index hit an intra-day high of 3,040.8 points, its highest since February 2010.
Over the last two months, the index has risen 27% compared to an 8% gain in the benchmark Sensex.
Among stocks, DLF, Godrej Properties, Oberoi Realty, Phoenix Mills, Prestige Estate, Indiabulls Real Estate, Sobha, Sunteck Realty have advanced 10-47% during the period.
The real estate sector, which was already under pressure, was also affected as construction activity came to a complete halt due to the lockdown.
But the sector bounced back once restrictions was lifted, growing at 10.7% in the second half of 2020- 21, compared to a 29.1% decline in the first half of the year.
While the uncertainty around the Covid crisis continues, economic prospects for India are better than these were a year ago.
Also, some companies like Oberoi Realty, Brigade, Godrej Property have reported better-than-expected pre-sales numbers in 2nd half of 2021 on the back of pent-up demand in the sector.
However, according to market experts, the quarter one of current year will not be as good as the last quarter due to the state-wise lockdown, but the long-term story of the real-estate market has been maintained.
After the lockdown, analysts say, property registrations saw a sharp recovery in June.
Record low interest rates, good schemes, discounts, are among the key drivers boosting outlook for the sector even as stamp duty cuts have been rolled back.
Real estate has seen a down cycle of more than five years following the implementation of Real Estate Regulatory Authority (RERA), demonetisation, credit issues, and then pandemic.
As a result, small players took a hit, losing market share. Along with this, customer preference for ready-to-move in properties and brand loyalty favour listed real-estate players.
It is expected that the real estate sector will outperform, and this may be a start of a new upcycle in the real-estate sector after consolidation in the last 10 years.
According to a CLSA report, top developers aim to double their sales over the next three to four years, benefiting from strong demand, affordability, and industry consolidation.
Most of them have been targeting strong cash flow generation and looking to reduce debt.
They also aim to ramp up new project acquisitions. Rising vacancies mar the near-term outlook in the office segment but it remains positive for the long term.
As per a global real estate consultancy firm report, June saw a 327% year on year (YoY) surge in registrations. With this, the sector hopes to end the year on a good number while attaining stability.
Also, the increase in women home buyers to 4.7% in June from 1.8% in May showcases the success of stamp duty reduction for women. Additionally, June also witnessed 42% new registrations.
Going forward, the sector expects significant traction from young home buyers and change in buying patterns, keeping in mind market dynamics.
We reached out to Brijesh Bhatia, Research Analyst at Equitymaster, and editor of the premium monthly recommendation service Fast Profits Report, for his technical view on the realty sector.
Here's what he has to say...
Among individual stocks, Indiabulls Real Estate surged 16.6% to Rs 140.3, also its 52-week high on the BSE, on the back of a three-fold jump in trading volumes.
Macrotech Developers hit a new high of Rs 814.9, up 6% on the BSE in the intra-day trade today.
Meanwhile, Mahindra Lifespace Developers rallied 11% to Rs 684, followed by Suntech Realty, up 5% at Rs 349.8.
Godrej Properties, Oberoi Realty, and Prestige Estate Projects ended the day up 2.6%, 3% and 2.4%, respectively.
Here's a list of realty stocks and their performance...
Returns | |||
---|---|---|---|
SCRIP | BSE PRICE(Rs) | 1 month | 1 year |
BRIGADE ENTERPRISES | 323 | 15.7% | 131.1% |
DLF | 310.1 | 1.9% | 111.8% |
GODREJ PROPERTIES | 1,519 | 7.8% | 73.2% |
INDIABULLS REAL EST | 138 | 29.3% | 111.7% |
JAIPRAKASH ASSO | 13.5 | 53.7% | 371.9% |
MAHINDRA LIFESPACE | 666 | 14.3% | 213.6% |
NBCC (INDIA) | 54.7 | 10.7% | 100.2% |
NCC | 96.3 | 17.5% | 194.9% |
OBEROI REALTY | 693 | 6.6% | 88.8% |
PHOENIX MILL | 867 | 5.8% | 46.0% |
PRESTIGE ESTATES | 303.3 | 4.1% | 51.6% |
SOBHA | 571.7 | 12.3% | 138.2% |
For more detailed updates, check the latest Real Estate / Construction sector results.
You can also compare realty stocks on our website.
Godrej Properties vs Indiabulls Real Estate
Oberoi Realty vs Prestige Estates
Sunteck Realty vs Macrotech Developers
To know what's moving the Indian stock markets today, check out the most recent share market updates here.
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