Multibagger Real Estate Stock To Buy Which Cut Debt, Has Massive Land Bank

Markets have been consolidating in a range for sometime now. The problem for the markets is that the indices look fairly valued at these levels and individuals would now have to look selectively for potential winners. Here are 2 smallcap stocks that could be multibaggers in the medium to long term.

Indiabulls Real Estate: Massive land bank in top cities

This is one of the top real estate players in the country, with massive presence in and around Mumbai. It's development projects are at some the best locations in Mumbai, including the popular Worli. The company has a massive land bank in Mumbai, NCR and Chennai of 1856 acres. The total landbank for the company is 3280 acres. The company has various development projects, including Blu Estate & Club, Worli, Sky Forest, Lower Parel, Indiabulls Greens, Panvel, One Indiabulls, Thane etc.

 

Reasons that the stock is a buy and can turn a multibagger

One of the top reasons to buy the stock is that the company has reduced debt even further for the quarter ending June 30, 2022. The net debt is now down to Rs 464 crores from Rs 1005 crores as at Q4 FY 2022. The second reason for the huge is the merger with the Embassy group, which is likely to be a formality only. The merger is in final stages of NCLT review and the next hearing in Chandigarh is scheduled on Sep 8, 2022. Once the merger goes through, there is a good possibility that the share price of the company would rally.

 

Sharp fall from 52-week highs

The stock of the company has fallen sharply from 52-week highs and one of the reasons for the same was the quarterly loss reported of Rs 51 crores. However, going ahead the company expects a net surplus of Rs 8,566 crore from its completed, ongoing and upcoming projects. It has unsold inventory of Rs 12,736 crore and receivables from customers against units already sold at Rs 3,030 crores. Overall, we believe that patient investors can buy the stock on decline. The stock has jumped sharply from levels of Rs 77 to Rs 83 and hence one needs to buy in small quantities at these levels.

Real estate sector stocks could be a good bet

With the real estate sector seeing good revival stocks from the sector are likely to do well. Also, with commodity prices like steel dropping, it is highly possible that we could see better margins going forward. The stock of IndiaBulls Real Estate thus remains a good buy given the reduction in debt, huge flows from existing properties and also good traction in the luxury housing segment seen.

Luxury Housing sector seeing robust demand

The demand in the housing sector, particularly the luxury segment has been growing, which is likely to benefit players like Indiabulls Housing Real Estate. According to sales data by real estate consultancy firm Anarock 17,740 luxury units (units priced above Rs 1.5 crore) sold in the entire calendar year 2019, 25,680 units were sold in the first half of 2022.

Also, unlike the affordable segment, where rising interest rates can be a dampener, in this segment, this could not be the case.

Disclaimer

Investing in stocks is risky. The author and Greynium Information Technologies should not be held responsible for losses incurred based on a decision in this article. The author owns shares in IndiaBulls Real Estate.