Which Real Estate Stocks Should You Have on Your Watchlist Today?

As I was casually scrolling through my daily dose of morning news, an interesting headline made me pause and click.

It was about India's fastest built structure - a factory unit completed in 150 hours. Spanning 1.51 lakh square feet, it's built at a cost of Rs 19 m (Rs 1.9 crore).

Thanks to modular construction technology - precast, prefabricated and pre-engineered structures - construction time can now be measured in hours or days and not months or years.

Under precast, building structures made of concrete are produced separately in factories. They are then transported to the location and assembled there to form a building.

Under prefab technology, the entire structure or module is factory made and transported as fully built units or semi knocked down units.

And then you have pre-engineered or steel buildings. Here, the steel structures are fabricated in the factories and transported to and assembled at the location.

While the penetration of pre-engineered, prefabrication, and precast is low in India, it has been prevalent in other technologically advanced countries such as China for a few years now.

This could change with massive urbanization, investments in infra, housing, ecommerce, and manufacturing in force. Not only does it save time and labour, but it is scalable (automaton /mass production option), environmentally sustainable, and cost efficient as well.

In short, this sounds like an idea whose time has come.

Already, the hub and spoke model for warehousing has led to demand for pre-engineered (PEB) warehouses.

Investments in manufacturing and industrial capex, metro rail projects, warehousing and cold storage, data centres, housing and healthcare, are some of the tailwinds for these companies.

So, it would be good to keep track of the companies offering or using the technology for pre-engineered buildings. The industry is expected to grow at 11-12% over the next five years.

The first on the list is Interarch Building Products Ltd. It's a leading player in pre-engineered construction industry that works from the project conception stage. Its clients include Amazon, Tata Group, Flipkart, and the companies in the renewable energy sector.

The company has the second largest manufacturing capacity of 161,000 MT per annum across multiple manufacturing units across PEB steel structures. It is one of the fastest growing players with regards to profits in the PEB space.

The management is targeting to double revenue in 3 to 4 years. For FY25, it is targeting 15-20% growth in profits.

The company has recently raised money through an IPO to fund its expansion plan and has minimal debt on the balance sheet. It is in the news currently for bidding for Tata group's lithium battery plant in Gujarat.

The other two candidates in the listed PEB space are Pennar Industries and Everest Industries ltd with pre-engineered buildings accounting for 49% and 27% of their revenue respectively.

Pennar is also into diversified engineering products and solutions, while Everest Industries is present in conventional building products as well.

Pennar Industries has an international presence and a capacity of 90,000 MT (FY24) while Everest Industries has a capacity of 72,000 MT.

The management is focusing on high margin segment, including the US market, and aspires to grow at 20-25% CAGR.

In the precast space, there is also PSP Projects. This construction company has been running a precast plant for the last 3 years. It was in the news recently for joining hands with the Adani group.

Ganesh Housing Corporation, a Gujarat based real estate developer is another company to take note of. The company has used precast construction technology in its projects.

Purvankara, another real estate developer, has a subsidiary that focuses on technology enabled solutions that has been using offsite construction technology.

Other names to keep in your watchlist include NBCC (India), J Kumar Infraprojects, APL Apollo tubes, Beardsell Ltd, and Hi Tech Pipes.

Do note that no view is implied on any of these firms. Nonetheless, it would be good to keep track of this trend and the firms participating in it.

The tech transition across most sectors in India has led to massive wealth creation, and there is a good possibility construction will witness this phenomenon as well.

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Warm regards,


Richa Agarwal
Editor and Research Analyst, Hidden Treasure
Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)