Real Estate Q4 Results Preview - Stable Performance: HDFC Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Institutional Equities

Going by the numbers for FY23 reported to date by top developers, we expect annual presales for most of them to surpass their previous highs.

Godrej Properties Ltd., Macrotech Developers Ltd. and Sobha Ltd., all reported their lifetime high in residential sales with Rs 122/120/52 billion respectively.

The annual growth also has been substantial with Godrej Properties growing by 55%, Macrotech Developers by 34% and Sobha by 34%. This has been on the back of robust launches in H2 FY23 and especially in Q4 FY23.

We expect the rest of the developers also to outperform both their own guidance and our expectation.

Till now, the 250 bps rate hike post-Covid has failed to dent the underlying secular housing demand in the sector. However, we are seeing early signs of weakness in the affordable segment.

This is on an expected line as this segment is most sensitive to a rate change as it directly hits the loan eligibility. Banks and non-banking financial companies have, however, till now supported the demand by offering discounted spreads on the benchmark rate.

The rate overhang is not expected to end any time soon and may see a few more quarters of uncertainty. Demand in the luxury segment has been robust and has been the driving force for higher price realisation; the NCR market that saw the maximum price appreciation this year has been driven by demand for luxury housing (‘The Arbour, DLF’—sold out in three days).

Click on the attachment to read the full report:

HDFC Securities Institutional Equities Real Estate - Q4FY23 Results Preview.pdf

Read Document

Also Read: Real Estate, Infra Q4 Results Preview - Order Inflows Witness Uptick For EPC Companies: ICICI Direct

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.