Real Estate
We expected our real estate coverage universe to report a mixed set of growth
numbers YoY while sequential performance is estimated to be muted across
companies. Good monsoons played a big impact on execution. We expect DLF
to report 9% YoY growth attributable to delay in approval of some key projects
and slower pace of leasing activity. Unitech is expected to deliver robust
growth of 59% on a smaller base though, sequentially, there could be a dip.
HDIL is expected to deliver 31% growth YoY and muted growth sequential.
TDR prices continue to remain robust though volume may get impacted due to
the monsoons. Orbit, with no new launches, is expected to report YoY decline
in sales of 13%.
Inventory level is expected to reduce in the absence of new launches. With the
festive season up close, we would see a slew of new launches, most of this
however, already priced in the recent outperformance of the real estate stocks.
EBIDTA margins continue to expand and companies focus on price led growth.
Net margins are expected to increase as deleveraging continues.
We remain positive on the regional players and expect price correction of 10-
15% before recommending convincing re-rating. HDIL, Puravankara
Projects and Orbit Corporation remain our top picks in the sector.
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