Realty index zooms 25% in 4 days; DLF m-cap crosses Rs 1 trillion

DLF, Godrej Properties and Oberoi Realty have rallied between 30 per cent and 41 per cent in the past four trading days

Shares of real estate companies extended their gains into fourth straight day with the S&P BSE Realty index surging 25 per cent during the period on strong demand ahead of festive season. Among individual stocks, DLF, Godrej Properties and Oberoi Realty have rallied between 30 and 41 per cent during the period under study.

At 01:22 pm, the S&P BSE Realty index was up 1.5 per cent as compared to a 0.17 per cent rise in the S&P BSE Sensex. The index hit a fresh 10-year high of 4,067.71 in Friday’s intra-day trade on the BSE. Individually, DLF's market capitalisation crossed Rs 1-trillion mark in intra-day deals.

Century Real Estate, a leading real estate developer and one of the largest landowners in South India, on Thursday announced that over 75 per cent of inventory, in their plotted development project Century Seasons, has been sold in just a quarter. The company’s other plotted development project, Century Greens, sold out entirely within two quarters.

Godrej Properties, meanwhile, on Wednesday said it achieved sales of Rs 575 crore in a single day at the launch of the second phase of its project Godrej Woods in Noida. The Mumbai-based real estate developer received an overwhelming customer response to its unique forest-themed phase named Evergreen taking total sales in the project in the past 6 months to approximately Rs 1,140 crore.

"We have sold 340 homes with an area of more than half a million square feet on the first day of launch making this one of the most successful launches in India in recent times," the company said in a statement.

Among other stocks, Oberoi Realty hit a new high of Rs 966.75, surging 14 per cent in the intra-day trade today. The stock of the Mumbai-based real estate developer has gained 35 per cent in past four days.

Oberoi Realty is one of India’s most established brands with a focussed strategy of need-based land acquisition, purchase of land parcels only from reputed players and addressing consumer aspirations across price points. The company has benefited from recent consolidation in the industry post RERA and demonetization. Historically low lending rates, stamp duty cuts and consumer preference for brands and ready-to-move-in properties augur well for Oberoi Realty.

Given Oberoi Realty’s strong pipeline in the high-growth Mumbai Metropolitan Region (MMR) market, a sizeable annuity portfolio and a lean balance sheet, we believe it is well-placed to capitalize on the upcoming real estate boom, analysts at Equirus Securities said in its initial coverage report on the stock. However, the stock trading above brokerage firm one year target price of Rs 914 per share.