Motilal Oswal Bullish On 6 High-Quality Real Estate Stocks, Assigns Buy For Up To 59% Return

Updated: Wednesday, January 18, 2023, 17:40 [IST]

Motilal Oswal in its December 2022 Results Preview report has picked 6 high-quality stocks from the Real Estate sector with a Buy Call. These high-quality stocks are Brigade Enterprise, Macrotech Developers, Mahindra Lifespaces, Oberoi Realty, Prestige Estates, and Sobha. According to the brokerage, these stocks are showing growth potential.

As per Anarock, the top-7 cities registered 5%/2% QoQ/YoY rise in housing sales in 4QCY22. Registration of properties in Mumbai city rose 2% YoY in 4QCY22 and came in at 120,000 units for CY22 - the highest in the last one decade, indicating sustained demand momentum despite rising interest rates.

1. Brigade Enterprise Ltd.

The brokerage with a buy on Brigade Enterprise assigns Rs 720/share target price. Stock purchased at the current market price could fetch gains up to 58%.
The stock last traded at Rs 456.30/share. Its 52 week low is Rs 376.15/share and 52 week high is Rs 585/share, respectively.
The stock gave 98.31% positive return in 3 years and 131.51% in 5 years, respectively. However, it gave 9.09% negative return in 1 year.
The brokerage said, "We expect revenue in 3QFY23 to INR9.4b, flat YoY. New bookings for the quarter can increase 29% YoY to INR9b. EBITDA can reach INR2.5b with a margin of 26.5%."

2. Macrotech Developers Ltd.

The brokerage assigned a buy on the stock of Macrotech Developers with a target price of Rs 1,530/share. It claims a potential upside of up to 39% in the share price from its current level.
On NSE, the stock last traded at Rs 1,106.90/share. Its recorded 52 week high is Rs 1,392/share and 52 week low is Rs 814.20/share, respectively.
The stock got listed on 19 April 2021 and since then it has given 137.92% positive returns. However, it has fallen 10.73% in the last 1 year. It gave 7.15% positive return in the last 1 month.
The brokerage said, "We expect revenue to grow 16% YoY. The company could achieve pre-sales of INR28b, up 7% YoY. EBITDA margin is expected to increase 200bps YoY, due change in product mix."

3. Mahindra Lifespaces Developers Ltd.

Motilal Oswal has a buy on Mahindra Lifespaces with a target price of Rs 550/share. It claims a potential upside of up to 59% in the share price from its current level.
On NSE, the stock last traded at Rs 347.80/share with 52-week high at Rs 550.75/share and the 52-week low at Rs 237.95/share.
The stock moved up 28.17% in the last 1 year. It moved up 152.64% in the last 3 years, whereas it moved up 103.73% in the last 5 years.
The brokerage said, "Revenue is expected to increase by 4x to INR1.1b in 3QFY23. We expect MLDL to double its bookings YoY to INR4.8b."

4. Oberoi Realty Ltd.

Motilal Oswal has rated Oberoi Realty "buy" with a target price of Rs 1,100/share. It claims the share price could jump up to 30% from its current level.
The market price of the stock is Rs 847.90/share on NSE. Its 52 week high is Rs 1,088.95/share and its 52 week low is Rs 725.95/share, respectively.
The stock has fallen 9.74% in the last 1 year. It gave 56.29% in the last 3 years. It has given maximum 68.88% positive return in the last 5 years.
The brokerage said, "We expect revenue to grow 6% YoY in 3QFY23E to INR8.8b. We expect EBITDA margin to increase 750bps YoY due to change in product mix and commencement of margin recognition at Mulund projects. We expected pre-sales to decrease 49% YoY to INR10b."

5. Prestige Estates Projects Ltd.

Motilal Oswal has placed a buy on Prestige Estates with a target price of Rs 675/share. If purchased at the current level it could fetch a return of up to 53%.
The current market price of the stock is Rs 441.75/share on NSE. The stock's 52 week high is Rs 554.90/share and its 52 week low is Rs 379/share, respectively.
The stock has fallen 16.12% in the last 1 year. However, it gave 17.77% positive return in the last 3 years and the highest 42.55% in the last 5 years.
The brokerage said, "We expect revenue in 3QFY23 to increase 40% YoY to INR18.6b. We expect the pre-sales to decline by 32% QoQ on a higher base to ~INR25b. EBITDA margin is expected to decline 200bps on account of change in product mix."

6. Sobha Ltd.

With a target price of Rs 850/share, Motilal Oswal has placed a buy on Sobha. If purchased at the current level it could fetch a return of up to 53%.
The stock last traded at Rs 593.40/share on NSE. The stock recorded its 52 week high at Rs 1,044.95/share and its 52 week low at Rs 480.20/share, respectively.
The stock declined 38.34% in the last 1 year. Whereas, it has given a maximum 31.57% in the last 3 years. The stock has given 8.79% positive return in the last 5 years.
The brokerage said, "We expect revenue in 3QFY23 to increase 18% YoY to INR7.9b. We expect pre-sales to increase 19% YoY to INR12.5b. EBITDA and Profits are not comparable due to restatement."

Disclaimer

The stocks have been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.