Realty shares in focus; Prestige, Godrej Properties, DLF rally up to 10%

The S&P BSE Realty index up 3 per cent was the top gainer among sectoral indices on Tuesday.

Shares of real estate companies were in focus with the S&P BSE Realty index surging 3 per cent, hitting 52-week high on the BSE in Tuesday's intra-day trade on expectation of strong demand. Prestige Estates Projects, Godrej Properties, DLF, Oberoi Realty and Phoenix Mills rallied up to 10 per cent.

At 10:22 AM; the S&P BSE Realty index, the top gainer among sectoral indices, was up 3 per cent, as compared to 0.57 per cent rise in the S&P BSE Sensex.

During Q2FY24 (July–September 2023), eight residential markets in India saw a surge in demand with sales of 82,612 residential units recording a growth of 12 per cent year on year (YoY). In volume terms Q2FY24 recorded a six-year high in quarterly sales volumes.

Residential sales continue to gain momentum, reaching multi-year highs. Although inventory levels have seen a significant rise due to developers launching projects to cater to this robust demand, the overall market health is improving, with strong sales velocity, said Shishir Baijal, Chairman and Managing Director of Knight Frank India.

Elevated interest rates and prices have had little impact on higher-ticket-size homebuyers, but the affordable segment has been severely affected, necessitating further interventions to stimulate demand and enhance development viability, said Shishir Baijal.

Among the individual stocks, Prestige Estates Projects hit a record high of Rs 735.90, as they surged 10 per cent in intra-day trade today.

During Q2FY24, Prestige Estates registered presales of Rs 7,092.6 crore, up by 102 per cent YoY and quarterly collections of Rs 2,639.8 crore driven by 6.84 mn sft (up by 50 per cent YoY) sales volume. The Group sold 3659 units during Q2FY24.

In the first six months (April to September) of FY24 the company achieved sales of Rs 11,007 crore, which is close to the sales of the entire 12 months of FY23, of Rs 12,931 crore.

With a promising pipeline of projects like Prestige Ocean Towers at Marine Lines, Mumbai; Prestige City Hyderabad- Apartments; Prestige Pallava Gardens in Chennai, etc, the management said the Prestige Estates is poised for continued growth throughout the rest of the year. The management believes that the best is yet to come, and are excited to shape the future of real estate with innovation, quality, and determination.

Meanwhile, Phoenix Mills (PML) witnessed a double digit like to like consumption across malls. With these, total consumption during Q2 stood at Rs 2,637 crore, up 20 per cent YoY. Excl. new malls contribution, like to like consumption was up 10 per cent YoY. Retail collections stood at Rs 638 crore in Q2, up 23 per cent YoY.

PML said its residential portfolio sales trajectory has seen good improvement backed by strong demand and faster conversions. Strong sales momentum continues, with gross residential sales of Rs 292 crore in Q2FY24, up 193 per cent YoY, with collections of around Rs 184 crore during the quarter.

According to DLF, the outlook for housing demand remains positive, with sustained momentum expected due to factors such as urbanization, improved affordability, favorable consumer sentiments and increasing aspirational needs.

The housing sector is witnessing a trend of consolidation and it is skewed towards the more organized and credible developers. This trend is primarily influenced by heightened consumer confidence in these brands, substantial improvements in their financial positions and their ability to deliver high-quality, secure and sustainable ecosystems over the years.

India continues to hold the pole position in the highly competitive services market, this demand is fueled by expansion of new global captives, R&D and the technology sector. This growth trajectory and investment inflow into the segment is expected to drive the office segment further.

In the retail sector, there has been a significant rebound with improved footfall and increased consumption across the portfolio. This resurgence is primarily supported by the recovery of the luxury segment and expansion of international brands, DLF said in its FY23 annual report.