4 Southern and Western India focussed realty stocks with “buy” reco can rally up to 46%

New buyers of property are inclined to invest in high-quality residential projects that complement their lifestyle. The consolidation within the residential real estate domain has gained momentum in recent years, propelled by regulatory shifts such as demonetization, GST implementation, and RERA enforcement, along with the NBFC liquidity crisis causing supply-side challenges for numerous developers. Consequently, consumers are increasingly drawn to recognized and organized real estate entities in response to these industry dynamics.

This week, two real estate companies announced that they have sold out their real estate projects. What was worth noting, the overall size of the project, time in which they were sold and the price point at which they were lapped up. Both, real estate prices and stocks of real estate have seen a revival for last three years, if above events are anything to go by than probably, it appears that the demand continues to be strong in some pockets. Given the fact that the operating matrix of the real estate industry is such that debt element will present, it would be worthwhile to stay with large players who have either strong parent group or have track record where they have survived the slowdown without piling on much debt on the balance sheet. Also stay focussed on pockets where income profile of consumer is better.

One sector which did not recover from the shock of the global financial crisis for more than a decade was the real estate sector. Excess inventory, over leveraged balance sheets and weak demand were some of the factors which plagued the sector. Although the process has been slow, it took almost a decade but there has been a clean up in the sector. Regulatory changes like bringing in RERA and banks getting aggressive in recovering dues from builders and also judicial intervention had an impact on the working of the industry.

After a long gap, real estate stocks are back in action. Some are reacting to their Q4 numbers which in some cases are coming better than what the street had been expecting. Stock Reports Plus, powered by Refinitiv, is a comprehensive research report that evaluates five key components of 4,000+ listed stocks - earnings, fundamentals, relative valuation, risk and price momentum to generate standardized scores.

In the correction that markets saw in the last four trading sessions, the financial sector stocks, right from banks to other players also declined. But if one looks at the magnitude and the internal breadth of the sector it was much better as compared to a month back when the market correction was started by HDFC bank. There was a bit of profit booking in the PSU bank space, but once again after a small corrective move, things were back with a strong intraday recovery. The way things are panning out in the industry with regulatory tightening taking place, there is very likely that we might see a divergence in performance of different segments of this sector which has the highest correlation with the GDP growth. Better balance sheets and strong franchise are likely to be the differentiating factors. The factor which is largely technical in nature is the shareholding patterns that will also impact the performance of the stocks from this sector.

After their heyday of 2008, real estate companies made a comeback in the second half of 2020. Especially the residential part of the real estate. Multiple factors brought them back to the centre stage. Increase in demand taking care of excess inventory, and some saving’s once again shifting toward real estate as an asset class.

Textile is one of the oldest industrial sectors in India. However, right from labour issues to smaller Asian countries becoming more competitive in terms of cost of production, different segments of the textile industry have faced more headwinds than tailwinds in their history of existence. This list is drawn from Stock Reports Plus, powered by Refinitiv, with over 4,000 listed stocks along with detailed company analysis focusing on five key components - earnings, fundamentals, relative valuation, risk and price momentum.

Like business and economic cycles, stock markets also have cycles where they will take a liking to a particular sector in such a manner that valuations will go through the roof. Then comes a phase, where the same sector is thrown down the dumps. Real estate sector is one sector where in 2008, valuations were at their peak. then come and fall and by the start of 2020 valuations were in the dumps. Thanks to many factors, including sudden spurt in demand in covid and post, sector being cleaned both due to pressure from the banks and the impact of new laws like RERA, there was an upswing in the industry. This happened at a time when liquidity was high and we have seen a resurgence of select real estate stocks. If one looks at the announcements coming from the industry about projects getting sold, it indicates that demand is high. Whether the stock prices are already reflecting the rosy picture?

India Business News: NEW DELHI: Flagging the real estate sector’s heavy dependence on money of homebuyers to build houses, Union housing secretary Manoj Joshi said on Mond.