Real estate shares at 15-yr high
Realty index rose 89% since March; Sector valuations (PBx) are now near 2021 peak multiples H-2
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New Delhi: The realty index is up 89 per cent since March 2023 bottom, following strong sales and RBI rate hike pause. Sector valuations (PBx) are now near the 2021 peak multiples, reducing rerating headroom, foreign brokerage, Jefferies said in a report.
Enthusiastic customer response means upgrades are still possible to pre-sales estimates in H-2; though at near 15-year high multiples, room for error for property stocks is limited, the report said. Sector valuations shot upto 2021 peak levels following a broad based rally post RBI rate pause in Mar23, it added.
Festive season bounce has driven October sales to surge 20 per cent YoY to over 50,000 units levels in top-7 cities. With inventory levels still declining, and pricing strong, developers are pushing for new launches in Q-3 to capitalize on the demand.
A strong Q-2 performance (pre-sales value +55 per cent YoY) has taken the sales of our 10-listed developer sample +35 per cent in H-1. With the strong launches coming through in Nov’23, we believe a record Q-3 is likely. We had raised the pre-sales est. for our covered developers by ~7 per cent in Q-2, and continued strong offtake could imply more upgrades ahead, the report said.
