Two Realty Stocks to Look at in Falling Market

  • Stock Market Analysis

The Indian real estate market has slumped for the last 6-7 years, but now it is showing a strong recovery. Thanks to a lower interest rate regime, the government’s support to the sector and home buyers, and consolidation in the industry. The increased pace of vaccinations and the unlocking theme also trigger the revival of residential and commercial construction activities. Notably, the Nifty Realty index gained 19.5% in a week, whereas Nifty 50 was up 1.06%. We have picked up two stocks in the realty sector that can give decent returns in the near future.

1. The Phoenix Mills Ltd. (NS: PHOE )


Incorporated in 1905, Phoenix Mills is India’s largest retail-led mixed-use developer. The company’s operation spans all aspects of real estate development; planning, execution, marketing, management, maintenance, and sales. The group has real estate assets in Mumbai, Raipur, Pune, Indore, Lucknow, Ahmedabad, and Bareilly. Phoenix has an operational retail area of approximately 7 million square feet spread over nine operational malls in six major cities of India. As the Covid-19 related relaxations ease, the footfalls and four-wheeler traffic has increased. The inward traffic has almost reached the pre-covid levels. The company is scouting for inorganic growth and new markets to diversify its geographical presence. Recently Phoenix stuck two big deals. The first is with Canada Pension Plan Investment, and the second is with the Government of Singapore. The company will develop residential and commercial projects in major Indian cities. With these joint ventures, PML is expected to double its retail portfolio by FY2026. All the Phoenix malls are known to have some of the most premium stores in them. Growing urbanization and changing lifestyle is most likely to keep the long-term growth story of Grade A malls intact.

In Q1FY2022, Phoenix Mills’ consolidated net revenue was Rs 204.26 crore, up 51.63% from Rs 134.71 crore in April-June 2020. EBITDA stood at Rs 88.21 crore, up 5.77% from Rs 83.40 crore during comparison. FIIs stake has marginally gone up in the June 2021 quarter. The stock has a ‘buy’ signal based on fundamental technical indicators such as RSI, MACD, 10-day/20-day/50-day/100-day/200-day EMA.

2. Oberoi Realty Ltd (NS: OEBO )

Oberoi Realty Ltd is a Mumbai-based real estate development company. The company is focused on premium developments in residential, office space, retail hospitality, and social infrastructure verticals. As the economy is opening up, the demand for residential areas is also growing. Oberoi Realty has a firm booking for its upcoming residential projects in Mumbai and nearby Mumbai. The company has a good cash reserve and land bank. Lower interest rates and the government’s supportive policies towards the real estate sector and the upcoming festival season will most likely push the company’s revenue growth.

Oberoi Realty posted healthy financials in Q1FY2022. The consolidated profit after tax rose to Rs 80.81 crore, up 176% from Rs 29.27 crore in the corresponding quarter of fiscal 2021. Consolidated revenue was Rs 294.77 crore, up 132.4% as against Rs 126.86 crore in Q1FY2021. Over the last five years, Oberoi displayed decent good growth on the revenue front. Its revenue CAGR was 7.5% as against the industry average of negative 3.64 %. Although there hasn’t been any change in promoters’ holding, MFs marginally increased their stake in June 2021 quarter. The share has a ‘buy’ indication based on vital technical parameters such as RSI, MACD, 10-day/20-day/50-day/100-day/200-day EMA.

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  • Ajit Pardeshi @Ajit Pardeshi
    over 6% down today. do you still recommend buying for Oberoi
    Like 0
    • Raja Sekhar Velisetti @Raja Sekhar Velisetti
      @Ajit Pardeshi The quick trigger for Oberoi it is included in F & O  from 1st October. Usually it is a +ve for price movement. Also Real estate has demand now. But the sector rallied from some days so pull back should be normal. But we have to be careful
      Like 1
    • uday jarajapu @uday jarajapu
      Good picks thanks
      Like 0
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  • desikan Sundararajan @desikan Sundararajan
    brilliant thoughts, thank you
    Like 1

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