KRChoksey has come out with its earning estimates on real estate sector for the quarter ended December 2012. According to the research firm, the sales momentum is expected to continue to improve from the current levels. It seems developers would have witnessed uptick both in terms of volume and pricing in Q3FY13.
Real Estate - The festive season coupled with the new launches to drive the top-line growth. We expect companies to witness decent sales volume across cities on the back of marginal reduction in home loan rates & anticipation of improvement in real estate market, which would ensure improved cashflow for developers. Furthermore, projects launched by majority of players including those by Sobha Developers (Sobha), Prestige Estates (Prestige) and others have received strong market response. Most of the developers are trying to monetize its non-core assets to pocket some cash to repay the debt burden. With robust launch pipeline planned in the coming quarters, we expect the sales momentum to continue to improve from the current levels. It seems developers would have witnessed uptick both in terms of volume and pricing in Q3FY13. Lastly, the recent rally in real estate stocks was on account of value buying opportunity due to availability of stocks at huge discount to its NAV and anticipation of revival in the sector on the back of cooling down of interest rate & likelihood of improvement in balance sheet with cashflow generation to players.| Company | Sales (Rs Cr) | PAT (Rs Cr) | P/E (FY13E) | ||
| FY13E | FY14E | FY13E | FY14E | ||
| Sobha Developers | 1,901 | 2,166 | 259 | 304 | 14.5 |
| DLF | 9,189 | 10,835 | 1,034 | 1,373 | 39.6 |
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