Nifty Realty index surges 8% in a month, outperforms Nifty50. Analysts share outlook, top picks

Time of India

3 days ago

Amid a challenging market environment driven by geopolitical uncertainties, the Nifty 50 index has managed a 1.4% gain over the past month. In contrast, the
Nifty Realty index
has outshined, soaring 8% during the same period.
This strong outperformance highlights the continued resilience and momentum in the
real estate sector
, even as broader markets face headwinds.
However, with such an outperformance, is there still time to enter into fresh investments in the sector? Or would it be wise to book some profits?
Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research at SBI Securities, highlights that although the Nifty Realty index saw some profit booking after its peak of 1,049.50 on June 9, the index continues to trade above its key short- and long-term moving averages, indicating that the upward trend is intact.
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Shah further notes that Nifty Realty has managed to hold above its 20-day exponential moving average (DEMA) in three out of the last seven sessions, a strong signal of ongoing positive momentum.
He expects the level of 990 to act as strong support, while a move above 1,040 could propel the index towards 1,140-1,150 levels.
Among the constituents, Shah favors
Oberoi Realty
and
Prestige Estates
as top picks in the real estate space.
He notes that
Oberoi Realty
is trading above its short-term moving averages, with its RSI and ADX indicators showing strong bullish momentum. A break above Rs 1,970 could see the stock testing Rs 2,020-2,030 levels.
Similarly,
Prestige Estates
is showing steady movement and could see continued upside, potentially reaching Rs 1,890-1,900 if it breaks past its resistance at Rs 1,755.
Meanwhile, Ashish Chaturmohta, Managing Director and Fund Manager at Apex PMS,
JM Financial Ltd.
, offers a broader view of the sector, emphasizing that real estate cycles typically last 7-8 years, and the sector is currently in the middle of an uptrend.
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Chaturmohta points out that the previous down cycle has paved the way for a shift towards organized developers, giving them pricing power and improving overall realizations.
He attributes the sector's renewed momentum to several macroeconomic factors, including lower interest rates driven by the Reserve Bank of India's policy actions, which have made borrowing cheaper and increased affordability for homebuyers.
Another key factor is the decline in inventory levels, with current levels at 16-17 months, a significant improvement from 42 months in the previous cycle.
Chaturmohta also highlights the ongoing shift in consumer preferences, with premium housing gaining more traction over mass or affordable segments, further boosted by consistent government support, especially in terms of stamp duty stability.
Additionally, the rise of new verticals like data centers, warehousing, and Special Economic Zones (SEZs), all of which are fueling demand due to growing digital and logistics infrastructure needs.
With improved access to funding, developers are in a stronger position to capitalize on new opportunities and manage market cycles more effectively.
Outlook for the sector
Overall, the real estate sector looks well-positioned for near-to-medium-term growth, driven by favorable macroeconomic factors such as low-interest rates, strong developer financials, and healthy demand dynamics.
Analysts remain optimistic about the sector's outlook, citing robust performance in the realty space, particularly in premium housing and urban redevelopment projects.