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Feb 28, 2011, 07.12 AM IST
PINC Research has come out with a report on India Real Estate sector with 9 stocks recommended.
Real Estate - Time for bottom fishing
The BSE Realty Index has underperformed broader indices by 47% LTM and 41% since April ’10. We believe that the broader macro economic factors such as high inflation, high asset prices and liquidity concern, will make the going tough for the sector in first 6 to 7 months of CY11. We have a long-term positive view on the sector as valuations at present look attractive. We recommend selective buying in the sector on the following factors:
Commercial Space View: We are positive on commercial space. We expect 20%+ CAGR in IT employee’s net addition for the next two years on account of higher office space demand. We have noticed an increase in absorption and marginal improvement in rentals in H2FY11 despite the higher inventory in the commercial space due to:
ANANT RAJ INDUSTRIES : We initiate coverage with a BUY recommendation and a target price of Rs 130 after giving 20% discount to NAV since the stock looks attractive from a valuation perspective. However, we will witness an upside movement only after the company’s residential launches.
DLF : We initiate coverage with a BUY rating on the stock and a TP of Rs 335, 20% discount to NAV. Key risks to our valuation are delay in launches, economic slowdown and rising inflation.
GODREJ PROPERTIES (GPL) : We initiate coverage on GPL with a ‘BUY’ rating and a TP of Rs 830 after assigning a 50% discount to the Vikhroli land bank (not a part of the total land development plan) and to MoUs (185 acres).
HOUSING DEVELOPMENT & INFRASTRUCTURE (HDIL): We initiate coverage with a BUY rating on the stock and a TP of Rs 225 after 20% discount to NAV.
PENINSULA LAND : We initiate with a SELL recommendation and a target price of Rs 65 after assigning 20% discount to NAV.
PHOENIX MILLS : We initiate coverage with a BUY on the stock and a target price of Rs 240 after assigning a 20% discount to NAV.
PURAVANKARA PROJECTS : We initiate coverage with a BUY on the stock and a TP of Rs 155
UNITECH : We initiate coverage with a BUY rating on the stock and a TP of Rs 55 after giving 20% discount to NAV.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
To read the full report click here
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