From Friday's close (September 17, 2021), Nifty Realty index has gained from 414 points to hit a fresh high of 508 in today's session, posting whopping gains of 23 percent in just 4 trading sessions. There is suggested a fresh breakout in the Nifty Realty index after a period of 10 years of consolidation and this paves the way for fresh upsides in the realty counters.
Triggers for good gains in the realty index
There is cheer in the overall real estate market amid record low home loan interest rate, push for affordable housing, increase in demand for big residential premises amid work from home regime, growth in the technology space and industry consolidation on the back of RERA. As per analysts, a need-driven investment into the sector has come into play. Also, as FD rates are at a record low and gold is expensive, realty is turning out to be the preferred investment option as the recent stamp duty cut is also providing a fillip.
Realty stocks to buy as suggested by analysts and brokerages as the outlook for India's real estate sector remains bullish
Sobha Ltd.: Angel Broking is bullish on this South India based realty counter and had recommended a 'Buy' on the scrip at a price of Rs. 730.2 for the long term, setting a target of Rs. 870 per share. This implies a straight 7 percent upside from current price of Rs. 810.6 per share.
Rationales given for a 'Buy':
Inventory levels for the company have moved down in last 1.5 years. The company is expected to launch 17 new projects spread over 12.56 mn sqft. We have seen a strong consolidation among listed players in India, says the brokerage firm.
Head of Research, Swastika Investmart Ltd. is of the view that the Nifty Realty index is coming out of 10 years of consolidation that may lead to a big bull run in the next 2-3 years. Sobha is their top pick in the realty space due to its diversified portfolio, strong growth, and healthy balance sheet.
Other preferred picks-Oberoi realty, Kolte Patil, Brigade enterprises, Prestige, and Suntek realty are other preferred picks.
Godrej Properties: This realty stock is also fundamentally strong and one can buy the scrip of Godrej on dips for good gains in the long term. The Mumbai-based realty major could well capitalize on the demand recovery in the residential space and sold residential units worth Rs. 575 crore at its luxury project in Noida in a single day.
"We have a very bullish view on the Indian real estate sector for the next 3-4 years and the market is also taking cognizance of the turnaround in the Indian realty sector where the Nifty realty index has been surging despite negative news are coming from Chinese real estate market, adds Head of Research, Swastika Investmart Ltd.