Global brokerage Jefferies remains optimistic about the real estate sector, citing a six-month high in residential sales during October, driven by robust festive demand. With the Nifty Realty index currently down 11 percent from its all-time highs, Jefferies identified Godrej Properties, Macrotech Developers, and DLF as its top picks.
According to the firm, value sales are trending 20 percent higher, supported by favorable pricing and an improved mix. Despite a weaker Q2 performance, Jefferies expects strong offtake to propel listed developers to achieve a 25 percent pre-sales growth in FY25. The sector is gearing up for significant activity, with large-scale new launches and an active project pipeline scheduled for the second half of the fiscal year.
However, Q2FY25 saw a mixed performance in the real estate sector. Residential pre-sales bookings declined by four percent year-on-year, primarily due to DLF’s 69 percent drop, attributed to the absence of new launches, according to a review note by Sharekhan.
Nevertheless, the broader real estate universe posted robust financial performance, with 45.5 percent revenue growth, 41.7 percent growth in operating profit, and a 51.8 percent rise in net profit YoY. This growth was driven by strong revenue booking across most developers, except for Mahindra Lifespaces and Oberoi Realty. Sharekhan remained positive on DLF, Macrotech Developers, and Sunteck Realty, citing a strong launch pipeline heavily weighted toward the latter half of FY25.
Investor sentiment toward real estate stocks has turned increasingly positive in recent days. Over the past six trading sessions, the Nifty Realty index has risen by 10 percent, outperforming the Nifty 50, which gained just two percent during the same period. This uptick reflects growing confidence in the sector’s resilience and potential for recovery, especially with a slew of new launches on the horizon.
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