Real Estate Stock Tips: Despite the increase in the construction cost, experts are positive about the real estate sector. By investing in these two stocks, you can earn up to 49 percent profit.
Real Estate Sector Stock Tips: The last quarter of the last financial year 2021-22 was a great one for the real estate sector with many developers doing the best presales/collection ever on record. According to analysts of domestic brokerage firm Motilal Oswal, the growth outlook in the real estate sector is also looking positive. In such a situation, the brokerage firm has advised to invest in Lodha and Oberoi Realty, in which you can earn up to 49 percent profit by investing.
The country’s top 10 listed developers reported annual volume growth of 36 per cent and value growth of 48 per cent in the financial year 2021-22. On the other hand, talking about the top four listed developers, their sales grew by 28 percent on a yearly basis and they got 35 percent more value annually, due to which their market share increased both in terms of value and volume.
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LODHA (Macrotech Developers)
Current price – Rs 1,068.70 (Close price on July 1 on NSE)
Target Price- Rs 1570
Upside- 47%
- Due to strong pre-sales, cash generation will be healthy for the next two to three years and it is estimated to be Rs 5 thousand-6 thousand crores.
- The company can get more deals in the current financial year 2022-23. The company aims to add projects of cumulative gross development value of Rs 15,000 crore.
- Its financial health is improving and valuations are also better.
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Oberoi Realty
Current Price – Rs 740.25 (Close Price on 1st July on NSE)
Target Price- Rs 1100
Upside- 49%
- The company’s management has anticipated some major redevelopment projects and business development of the land outside Mumbai.
- The company has recently added some projects in the current financial year 2022-23, about which the company is positive.
- According to the brokerage firm, the focus on business development is a positive sign and due to this, the company’s growth will be better.
Why Experts Positive Despite Increased Cost?
Talking about the cost, the construction cost of most companies increased by 12-15 per cent but if the construction cost accounts for 25-40 per cent of the selling price, then the overall impact on the margin will be only 3-6 per cent. Developers believe that the mortgage rate of up to 8 per cent will not have any significant impact on demand, but if the rate reaches above this, then the demand may be affected for the next two quarters.
(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
