Rising raw material costs make analysts cautious on realty stocks

Over the last one year, developers' average cost of construction has risen 10 - 12 per cent, owing to higher input cost due to supply-side constraints

Analysts are turning cautious on stocks of real estate companies, which have been hit by a double whammy of rising input costs that may push them to pass on this surge to the consumers and a possible rise in interest / home loan rates over the next few months that can slow their sales.

At the bourses, the Nifty Realty index has been an underperformer, slipping nearly 7 per cent thus far in calendar year 2022 (CY22) as compared to around 1 per cent dip in the Nifty50 index. Indiabulls Real Estate, Sobha, Godrej Properties, Macrotech Developers and Sunteck Realty