Stock To Buy: Motilal Oswal Positive On 3 Large Cap Real Estate Stocks, Sees Gains Up To 30%

Leading brokerage firm Motilal Oswal has assigned Buy ratings on three large-cap Real Estate sector stocks. These 3 stocks are Macrotech Developers Ltd. (Lodha), Oberoi Realty Ltd., and Godrej Properties Ltd.

According to the brokerage, 4QFY23 turned out to be the best quarter for most of the top-12 listed companies as they delivered 44% YoY growth in pre-sales. In FY23, our coverage companies posted 43% YoY growth in pre-sales. Excluding DLF, which doubled its pre-sales in FY23, cumulative growth for other coverage stocks was still healthy at 32%.

1. Macrotech Developers Ltd. (Lodha)

Lodha is Motilal Oswal's top preferred pick from the stock. It has assigned a Buy on the stock with a target price of Rs. 775/share. According to the brokerage's given target price, the stock is likely to give a decent return of 30%.

The stock last traded at Rs. 599.25/share on NSE. It has given 7.49% return in 1 week, 24.89% in 1 month, and 28.94% in 3 months, respectively. It has given 8.4% positive return in 1 year. It was listed on 19 April 2021.

Brokerage's Views

The company witnessed the highest-ever walk-ins of 100k customers in FY23 (15% higher vs. FY22). Conversions increased by 11% to 7.5% from 6.8% in FY22.

Guidance: In line with its medium-term target, LODHA expects to deliver 20% growth in pre-sales to INR145b in FY24.

UK investments: LODHA added INR198GDV of new projects in FY23 and expects to maintain the momentum as it aims to add new projects with GDV of INR175b in FY24

2. Oberoi Realty Ltd.

The brokerage has assigned Buy to the stock with a target price of Rs. 1,140/share. It claims a potential upside of 18% potential upside from the stock's current market price.

The stock last traded at Rs. 965.85/share on NSE. It has given a decent return of 21.51% in 1 year, 159.46% in 3 years and 87.87% in 5 years, respectively.

Brokerage's Views

BD: The company expects the strong BD momentum to continue and it aims to add new projects with a GDV of INR150b in FY24.

Guidance: GPL ended FY23 with the highest-ever bookings of INR122b and expects demand to remain intact amid favorable affordability. It targets INR140b in pre-sales in FY24. In the medium term, the management expects the sector to witness strong growth on the back of under-penetration of home ownership in India.

New launches: GPL intends to launch ~20msf in FY24, including key projects at Ashok Vihar (Delhi), Worli and Mahalaxmi.

3. Godrej Properties Ltd.

Godrej Properties Ltd. is the preferred pick by Motilal Oswal. The brokerage has assigned a target price of Rs. 1,750/share. It sees 23% potential upside from the stock's current market price.

The stock last traded at Rs. 1,429.90/share. It gave 4.25% return in 1 year, 71.42% in 3 years and 81.02%in 5 years, respectively.

Brokerage's Views

BD: The company expects the strong BD momentum to continue and it aims to add new projects with a GDV of INR150b in FY24.

Guidance: GPL ended FY23 with the highest-ever bookings of INR122b and expects demand to remain intact amid favorable affordability. It targets INR140b in pre-sales in FY24. In the medium term, the management expects the sector to witness strong growth on the back of under-penetration of home ownership in India.

New launches: GPL intends to launch ~20msf in FY24, including key projects at Ashok Vihar (Delhi), Worli and Mahalaxmi.

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.