Realty shares rise on positive outlook; Oberoi, Godrej, Sobha gain up to 9%

Shares of real estate companies rallied up to 9 per cent on the BSE on Monday on positive outlook. Oberoi Realty, Godrej Properties, Sobha, Indiabulls Real Estate, DLF, Prestige Estates Projects and Macrotech Developers (Lodha) surged between 3 per cent and 9 per cent on the BSE in intra-day trade today.

At 01:05 pm, the S&P BSE Realty index, the top gainer among sectoral indices, was up 4.7 per cent, as compared to a 0.59 per cent rise in the S&P BSE Sensex. The realty index, however, is down 9 per cent from its 52-week high level of 4,383, touched on October 18, 2021.

Among individual stocks, Oberoi Realty zoomed 9 per cent to Rs 984.35 after the Mumbai-based real estate developer said the company has achieved gross bookings of around Rs 787 crore during the launch of its new tower in the Elysian project at Oberoi Garden City, Goregaon, Mumbai. With this, the cumulative gross booking value from January 1, 2021 till date in Oberoi Garden City stood at around Rs 2,705 crore, the company said. The stock had hit a record high of Rs 1,007 on October 14, 2021.

DLF, meanwhile, was up 4 per cent to Rs 415 on the BSE in intra-day trade after the company reported 61 per cent year-on-year (YoY) jump in its consolidated net profit at Rs 380 crore for the second quarter ended September 2021 (Q2FY22).

"The residential business continues to tread on its growth trajectory with healthy traction and strong demand momentum across segments and geographies. New sales bookings exhibited a strong performance during the quarter and stood at Rs 1,512 crore, reflecting a YoY growth of 77 per cent," DLF said.

The management further said we are encouraged with these improving demand trends in the residential markets and expect these trends to remain for the long run. "Given this positive outlook supported by improved fundamental drivers, we continue with our endeavor of bringing new offerings across segments and geographies. With increasing volumes and well calibrated price hikes, we expect further margin expansion for our projects," it said.

According to HDFC Securities, given the fact that DLF is reviving office Capex plans, it is taking price hikes in the premium segment, there is stabilisation of office vacancy, and the company has robust launch plans. "We maintain BUY, to factor in demand recovery (office and residential) and better property price realisation," it said in a result update note.

"While the sector may see near-term headwinds, the long-term story remains intact. We continue to believe that tier-1 developers will gain market share, given consumers’ increasing buying preference for reputed developers in under construction projects. We remain positively biased towards the sector," the brokerage firm said in recent sector report.