Nifty Realty index nears 52-week high; Oberoi Realty hits record high

Godrej Properties, Puravankara, Kolte-Patil, Sunteck Realty and Ajmera Realty hit 52-week highs

Shares of select real estate companies were trading firm with the Nifty Realty index reaching closer to its 52-week high in an otherwise weak market.

At 02:10 pm; Nifty Realty index, the largest gainer among sectoroal indices, was up 1.78% at 214.25 as compared to 0.65% decline in the Nifty 50 index. The index hit an intra-day high of 214.30, close to its 52-week high of 216.05 touched on August 10, 2016.

Since December 26, 2016, from its recent low, the Nifty Realty index surged 35% against 15% rise in the benchmark index. Kolte-Patil Developers, Delta Corp, Sunteck Realty, Dilip Buildcon, Brigade Enterprises and Ashiana Housing have rallied more than 50% each during the period.

Meanwhile, the S&P BSE Realty index too up 1% against 0.69% decline in the S&P BSE Sensex. Godrej Properties, Oberoi Realty, Puravankara, Kolte-Patil Developers, Sunteck Realty and Ajmera Realty have hit their respective 52-week highs on the bourses.

The government on February 1, 2017 announced infrastructure status to affordable housing to encourage investment in this segment and offered tax sops to developers sitting on completed but unsold inventories. The government also proposed to reduce the capital gains tax liability on immovable property to promote the real estate sector and to make it more attractive for investment.

According to analysts at JP Morgan, earnings growth has started to revive selectively across names and should revive in a broad-based manner in the residential business by FY18.
 

“This does not assume any pre-sales recovery, which we expect to be flat across companies, but rather a run-down of legacy low margin book, which should be completely delivered by FY17 end across most names. Margin recovery hence should revive earnings growth across the space,” the foreign brokerage firm said in recent report.

Oberoi Realty hit a record high of Rs 396, up 6.5% on BSE in intra-day trade on expectation of significant jump in cash flows and earnings recovery given solid offtake in recent launches.

Company	LTP	% chg*	%chg#
Sobha	342.80	7.66	39.52
Delta Corp	179.25	5.97	87.89
Prestige Estates	208.50	4.72	24.44
Oberoi Realty	388.10	4.44	32.93
J Kumar Infra	260.40	4.22	37.34
Puravankara	61.30	2.59	37.44
Godrej Propert.	398.10	2.29	35.87
Sunteck Realty	362.50	1.98	72.95
Kolte Patil Dev.	160.00	1.65	96.92
Anant Raj	48.75	1.14	32.11
Nifty Realty	214.25	1.78	35.05
S&P BSE Realty	1593.03	0.95	30.17
Nifty 50	9062.15	-0.65	14.59
LTP: Last traded price on BSE in Rs at 02:10 pm
* change over previous day
# change over December 26, 2016