Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Real Estate - 2QFY22 Results Preview - Strong presales momentum - HDFC Securities

Posted On: 2021-10-12 22:05:41 (Time Zone: IST)


Mr. Parikshit D Kandpal, CFA, HDFC Securities and Mr. Manoj Rawat, Institutional Research Analyst, HDFC Securities

Robust presales momentum: The rerating of real estate stocks has surprised the street as well as us, with Nifty Realty Index having outperformed the Nifty Midcap 50 Index by 63% over the past year. Whilst we were positive on the sector, the extent of outperformance has been beyond our forecasts. The pandemic played a catalyst in accelerating market share gains into the hands of organised real estate players. Banks, equity capital providers, buyers, and supply chains aligned with stronger developers to further solidify this shift. Economic recovery, high attrition backed by higher salaries, robust stock markets, low interest rates, high affordability, collapse of tier-2 developer ecosystem, new launches and quest for large house ownership/house ownership are some of the tailwinds fueling this recovery. We believe that this recovery has multiple legs and strong branded developers stand to gain disproportionately.

New order in place, affordability high on elasticity: Buoyed by economic/income recovery/robust stock market wealth creation, the top eight cities in India are seeing a strong growth momentum. We see that demand for larger homes has increased. Buyers are chasing the best developers, while demand for plotted, independent floor, and low-rise development is on the rise. Buyers are flexible on capital values, beyond a certain preset threshold, in case a project is good. They are ready to shell out more. Paying elasticity is higher in luxury segment now and developers like DLF and Oberoi stand to benefit.

Malls' consumption smart recovery, re-occupancies to arrest further rise in office vacancies: We have seen strong traction in consumption post the opening of malls. Now with relaxations in multiplexes, the crowd is back. This may result in consumption normalisation by Nov-21 exit. Work from home seems to be ending now with gradual return to office, though offices are still working on hybrid mode and full return may take time until Mar-22. At least in the interim, it will arrest rise in vacancies and some discussion will start on new leasing. Hospitality too is seeing strong traction and, with the resumption of international travel, the occupancies and ARRs may improve.

Q2FY22 presales momentum strong; some impact of demand shift from Q1FY22, while Q3FY22 should be the best quarter: As a change from tradition, buoyed by market sentiment, some of the developers have started disclosing presales numbers ahead of results. Further, we expect DLF to report presales in excess of INR 10bn (Brigade - INR 10bn and Mlife - INR 3bn). The presales momentum may continue into the festive season with incremental delta likely to accrue on account of new launches. We expect Prestige, Oberoi and GPL to make new records during Q3FY22, if launches remain on track.

Q2FY22 earnings trend for the sector: We expect the aggregate revenue/EBITDA/PAT for the coverage universe to grow sequentially by 22/31/0%. The impact of commodities' prices will smoothen over the project completion period as companies will take the hit once projects complete. In our assessment, the non-Mumbai developers need to take about 5-6% price hike to absorb commodity inflation, while higher realisation in Mumbai projects may warrant a 2-3% price hike. Overall, taking price hikes may derail recovery and developers may not go ahead with the same.

Recommendations and stock picks: 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. Top picks: DLF, Oberoi Realty, Phoenix Mills, Brigade and Mahindra Lifespaces.


Click here to send ur comments or to feedback@equitybulls.com

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Mphasis - 2QFY22 Result Update - Growth Resiliency Continues; Raise Target Price - Reliance Research

Maintain ADD on Havells India - Outperformance continues; miss on margin - HDFC Securities

Indraprastha Gas - Company Update - EV vs CNG; TCO Economics Favour CNG - Reliance Research

FinTech Playbook - Discount Brokers - 'Nudging' the long tail of standalone brokers - HDFC Securities

Tata Communication - Revenue growth remains muted - YES Securities

Havells India Ltd - Q2FY22 Result Update - YES Securities

ICICI Lombard General Insurance - Q2FY22 Result Update - YES Securities

Syngene International Ltd - Lack of near term triggers - YES Securities

Mphasis - Q2FY22 First Cut - YES Securities

IndiaMART InterMESH - Q2FY22 First Cut - YES Securities

Sterlite Technologies - Q2FY22 First Cut - YES Securities

Can Fin Homes - Q2FY22 First Cut - YES Securities

Havells India - 2QFY22 Result Update - Strong Revenue Growth; Higher Commodity Prices Impact Earnings - Reliance Research

TVS Motor - 2QFY22 Result Update - Healthy Exports Coupled with New Launches to Aid Higher Margins - Reliance Research

Maintain SELL on Jubilant FoodWorks - No big fireworks unlike in other discretionary names - HDFC Securities

Sonata Software - Strong execution - HDFC Securities

Navin Fluorine International - Muted performance - HDFC Securities

Maintain ADD on Heidelberg Cement - Cost pass-through efforts to protect margin - HDFC Securities

Maintain BUY on Mastek - Minor misses, recovery underway - HDFC Securities

Oil and Gas - Q2FY22 Results Preview Report - HDFC Securities

Building Materials - Q2FY22 Results Preview Report - Strong recovery! - HDFC Securities

Jubilant Foodworks - Soft SSSG in the quarter but record store openings points to strong outlook ahead - YES Securities

L&T Technology Services - Overall, performance was ahead of expectations - YES Securities

Just Dial Ltd - Both revenue and EBITDA below expectation. PAT boosted by higher other income - YES Securities

Syngene International Ltd - Lower gross margin lead to EBIDTA miss - YES Securities

GMR Infrastructure - Airports to drive value; initiate with a HOLD - ICICI Securities

ICICI Prudential Life Insurance - Business mix more balanced than ever; volume vs margin pose near-term quandary - ICICI Securities

HeidelbergCement India - Margins impacted by cost escalations - ICICI Securities

Navin Fluorine International - Revenue growth still some time away - ICICI Securities

Havells India - Strong volume led revenue growth - ICICI Securities

Q3CY21 Result Update - ACC Ltd - ICICI Direct

Q2FY22 Result Update - 5paisa Capital - ICICI Direct

Q2FY22 Result Update - Hindustan Unilever - ICICI Direct

Tata Communications - Q2FY22 First Cut - ICICI Direct

Q3CY21 Result Update - Nestle India - ICICI Direct

HeidelbergCement India - 2QFY22 Result Update - Steady Volume and Better Realizations Aid Performance - Reliance Research

Maintain BUY on UltraTech Cement - Strong demand moderates impact of cost inflation - HDFC Securities

ACC - 2QFY22 Result Update - Performance Beat Despite Elevated Input Costs - Reliance Securities

Maintain ADD on L&T Infotech - Riding the wave - HDFC Securities

Maintain REDUCE on Hindustan Unilever - Miss in volume, no respite on margin front - HDFC Securities

Maintain REDUCE on Nestle India - Revenue momentum sustains; miss in margin - HDFC Securities

L&T Technology Services - ER&D leadership shines through - HDFC Securities

Maintain BUY on ACC - Mixed performance - HDFC Securities

Power Plus - Demand remains strong but coal stock is critical - HDFC Securities

At 11-year high, BSE Realty Index still lower than 2008 peak

Leveraged financials - 2QFY22E Results Preview Report - HDFC Securities

UltraTech Cement - Revenue Inline, inflated cost dragged EBITDA - YES Securities

Craftsman Automation - Q2FY22 First Cut - YES Securities

Ultratech Cement - 2QFY22 Result Update - Elevated Costs Pressure Led To Earnings Miss - Reliance Securities

L&T Infotech - Q2FY22 Result highlights - YES Securities


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020