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Business News/ Markets / Stock Markets/  Four realty stocks including Phoenix Mills, Macrotech Developers hit new record highs; here's why
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Four realty stocks including Phoenix Mills, Macrotech Developers hit new record highs; here's why

Macrotech Developers, Brigade Enterprises, Phoenix Mills and Oberoi Realty shares reached new highs in today's trading session. The strong performance of real estate stocks is attributed to increased demand for houses and FII inflow into the sector.

Brigade Enterprises shares this year have performed exceptionally well, rewarding their shareholders with a return of nearly 48%.Premium
Brigade Enterprises shares this year have performed exceptionally well, rewarding their shareholders with a return of nearly 48%.

The winning momentum in the realty sector continued into Monday's trading session, with a majority of realty stocks hitting fresh all-time highs. The Nifty Realty index surged by 2% today, marking a new record level at 656.65.

Among the 10 constituents of the index, seven stocks achieved new 52-week highs today, with four of them, including Phoenix Mills, Oberoi Realty, Brigade Enterprises, and Macrotech Developers, attaining new record highs by maintaining their robust upward trajectory.

Macrotech Developers stock has been on a remarkable winning streak since the company's Q2 FY24 results announcement on October 28. Over the past five trading sessions, the stock surged from 737 apiece to 849, marking a substantial gain of 15.20%.

Also Read: Lodha share price jumps over 4% on Q2 results boost

In today's trading session, the stock continued its impressive run by surging an additional 3.65%, setting a new all-time high at 880 apiece. In Q2FY24, the company achieved its best-ever quarterly pre-sales, reaching 3,530 crore, marking a 12% YoY increase.

Collections for Q2FY24 also saw a healthy rise, up by 16% YoY at 2,750 crore. Notably, the company managed to reduce its net debt by 540 to reach 6,730 crore. However, its net profit in Q2 FY24 decreased by 42.4% YoY, amounting to 210 crore.

Also Read: For Bengaluru households, it’s real estate over financial investments

In a similar fashion, Brigade Enterprises also saw its stock hit a new record high of 718.8 apiece in today's session. The shares this year have performed exceptionally well, rewarding their shareholders with a return of nearly 48%.

Phoenix Mills and Oberoi Realty shares also reached new highs of 2,087.80 apiece and 1,251.2 apiece, respectively. Oberoi Realty released its Q2FY24 results on October 27, with a 43% improvement in its consolidated net profit at 456 crore, as compared to a net profit of 319 crore in Q2FY23.

Also Read: Demand for luxury homes worth over 1.5 crore goes up this year: Report

The consolidated revenue for Q2 FY24 jumped 33.23% to 1,243.80 crore as against 933.56 crore for Q1 FY24.

What has changed in the real estate sector for its continued outperformance in comparison to other sectors?

Akhil Bhardwaj, Senior Partner at Alpha Capital, said," The Realty index was severely impacted by the subprime crisis in 2008, and it came down by around 90%. This was a new birth to the real estate index. Thereafter, the new avatar took some initial 5 years to build its base, and thereafter, since 2013, the Nifty real estate index has never seen a look back."

He said that over the last 10 years, Nifty Realty has given a 254% absolute return compared to the 203% return of Nifty 50. He further pointed out that in the last 5 years, the Nifty Realty index had a 183% absolute return as compared to 83% of the Nifty 50. This is a straight 100% extra return over nifty 50. The big contribution is from last year, i.e., 42% vs. 6%, he said.

Also Read: Mumbai’s real estate registrations surge during festive season

He pointed out the multiple factors contributing to the strong performance of real estate stocks.

"Post-COVID, the demand for houses has skyrocketed. Those living in small houses wish for bigger houses with extra room for office space due to WFH culture pickup. Second is the FII inflow into the real estate sector. According to Colliers, around $27 billion has come into the real estate sector in the last six years. This is a three-times higher number compared to the previous six years," he stated.

Also Read: 9 Key strategies for real estate investments

"The main credit for the same goes to accommodative FDI policies. Another major reason is that a consistent home loan rate has sweetened sales in the real estate sector. All these factors are reflected in the record-breaking sales of companies like DLF, Prestige, Sobha, and other real estate stocks," he added.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 06 Nov 2023, 03:46 PM IST
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