Realty share price target

We expect strong YoY revenue growth for construction companies driven by a depressed base, albeit a decline on a QoQ basis on account of the second wave. For real estate companies, sales volumes are expected to come off sequentially, though much better than washout base of Q1FY21. Sales volume to decline QoQ amid second wave lockdowns We anticipate residential sales momentum to take a breather in Q1FY22E owing to second wave. On a medium term, triggers such as pent up demand, benign interest rates, launches will continue to boost momentum,...

In Q4FY21, we expect strong revenue growth for construction companies driven by a benign base and pick-up in execution. For real estate companies, key highlight will be continued robust residential sales volumes growth led by factors such as pent up demand, benign interest rates and measures such as a cut in stamp duty in Maharashtra. Residential sales volumes traction to remain healthy We anticipate residential sales will maintain their strong momentum in Q4FY21 led by pent up demand, benign interest rates, launches and...

We recommend HOLD with a DCF based target price of Rs 376 (7% upside).

In Q3FY21, we expect construction companies to return to topline growth driven by near optimum labour availability, pick-up in execution. For real estate companies, key highlight will be strong residential sales volumes growth led by factors like pent up demand, benign interest rates, measures like stamp duty cut in Maharashtra. However, financial numbers of real estate companies will look optically weak due to rental waiver in retail...

IPO NOTE

Real estate players (like all major sectors) have faced the brunt of Covid-19, which is apparent from the stocks having seen a sharp correction in the past month. Segment wise, mall developers would be the first casualty with closure of malls and invocation of Force Majeure by at least some tenants. Similarly, home buyers' demand as well as construction stoppage will impact the residential segment. On the other hand, office segment cash flows remain protected. We expect the ground level situation to remain operationally challenging for all companies in our coverage universe amid...

Top Picks: DLF and Sobha The NIFTY Realty index has delivered ~21% returns over the last 3M, largely driven by DLF delivering 58% returns. Whilst residential markets remain muted, cap rate compression has started reflecting in stock prices. Though there is a marginal recovery in the premium segment viz. Gurgaon for DLF and in pockets of Mumbai, the overall sentiment still remains muted.

The cogs of this flywheel include (a) Real estate choices (we mapped networks across income profiles and population density of 460+ districts), (b) Assortment/mix and pricing (across 1,50,000 SKUs), (c) Financial position of 40+ retailers. Despite the huge opportunity, food & grocery (F&G;) and Apparel exhibit divergent trends. While F&G; is consolidating, Apparel is gradually fragmenting. Both trends make it imperative to identify whos got the proverbial flywheel (momentum) moving.