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Time of India
04-07-2025
- Business
- Time of India
Realty rally may have peaked, go for stock-specific bets: Analysts
Mumbai: As a broad, sectoral investment theme, real estate may have already had its best run in the current upcycle with analysts suggesting specific stocks that provide growth and earnings comfort amid elevated valuations. Nifty Realty index is down 8.5% in 2025 so far, compared with 7% gains for the benchmark Nifty. On Thursday, the realty index ended 0.7% lower. It has declined 4.5% in the last five trading sessions. "In FY25, the real estate sector saw a 3% decline in volumes, even as value grew 10%. After years of strong momentum, the election year led to project approval delays and a 13% drop in launches, with Hyderabad and Mumbai more affected than NCR (national capital region) and Bangalore," said Pankaj Kumar, VP - fundamental research at Kotak Securities. Kumar said while due to this, stocks of most listed players have corrected, valuations still aren't very comfortable in the sector. However, some analysts said FY26 may be better in terms of business for these companies. "With the supply-side issues largely resolved and lower home loan rates expected to boost demand, our outlook for the sector is cautiously positive. However, valuations still remain elevated for most companies," said Anil R, research analyst at Geojit Investments. Real estate companies like Anant Raj, Oberoi Realty , Godrej Properties , and Brigade Enterprises have declined 15-36% this year. CYCLICAL PLAY? Vipul Bhowar, senior director — head of equities at Waterfield Advisors, said the market is currently in the fifth year of the typical eight year real-estate cycle, and the most recent one began in 2020. 'In the first four years, real estate stocks, along with cement and steel companies, tend to rally on new project launches. In the following four years, as projects near completion, investors often book profits and capital shifts to ancillary sectors such as tiles, plywood, paints, electrical goods and housing finance companies,' said Bhowar. The Nifty Realty index had gone up almost 81% and 34% in 2023 and 2024, respectively. WHAT SHOULD INVESTORS DO? Kotak's Kumar said he remains positive on select names. 'DLF has a strong launch pipeline and land reserves, and our fair value for the stock is `1,020. Macrotech has guided for 20% growth this year, we value it at `1,480. Prestige, after a weak FY25, is well-positioned to rebound as it has several launches lined up, and our fair value for the share is `1,700,' he said. Kumar's targets imply an upside of 6-23% in these stocks. 'While upside may be limited in the near term, these stocks can be added on dips,' he said. Anil R of Geojit prefers Brigade Enterprises and Prestige Estates for their stable rental income and robust FY26 launch pipelines. 'We recommend investors consider booking profits in real estate stocks and reallocating to its ancillary segments,' said Bhowar.
Indian Express
02-05-2025
- Business
- Indian Express
Rally in defence stocks: Strong order book, sentiment-driven buying fuel surge
An improvement in order books, correction in prices, and sentiment-driven buying have triggered a significant rally in the defence stocks over the last two months. The Nifty India Defence Index, which tracks the performance of portfolio of stocks that broadly represent the defence theme, has rallied nearly 40 per cent since March 1, 2025. The index has risen by around 2,000 points, or nearly 39 per cent, to 7128.8 as on April 30, 2025. The 18 constituents of the index have also seen an impressive rally. In the last two months, Hindustan Aeronautics Ltd surged 45 per cent, Mazagon Dock Shipbuilders Ltd gained 41 per cent, Astra Microwave Products Limited rose 35 per cent, Bharat Electronic Ltd climbed 27 per cent and Cochin Shipyard rose 24 per cent. 'The recent rally in the defence stocks is driven by new orders which some companies such as HAL and Bharat Electronics Ltd are receiving,' said Anil R, Senior Research analyst, Geojit Investments Ltd. On April 29, the Nifty India Defence index rallied 4.2 per cent to touch an all-time high of 8,418.05 after Pakistan's Defence Minister Khawaja Asif said a military attack by India is imminent in the wake of terror attack on tourists in Pahalgam. 'In the last few days, defence stocks have started rising due to the ongoing tension between India and Pakistan. It is purely a sentiment-driven pickup,' said an analyst. Order Book Inflows In March, Hindustan Aeronautics Ltd signed two contracts with the Ministry of Defence for the supply of 156 Light Combat Helicopters (LCH), Prachand to the Indian Army (90 nos) and Indian Air Force (66 nos) along with training and other associated equipment worth around Rs 62,700 crore. In April, Bharat Electronics Ltd (BEL) signed a contract with the Ministry of Defence worth around Rs 2,210 crores for supply of Electronic Warfare (EW) Suite for Mi 17 V5 Helicopters of the Indian Air Force. The government's focus on self-reliance in defence manufacturing by procuring new products from domestic sources is also leading to a positive sentiment for the sector, analysts said. In March, the Defence Acquisition Council (DAC) approved a defence procurement proposal worth Rs 54,000 crore. The Nifty India Defence index peaked in July 2024 driven by higher order books. It touched a high of 8,302.03 on July 11, 2024 but subsequently saw a sharp correction of around 38 per cent between July 11, 2024 and February 28, 2025. The corrections in stock prices of some of the companies is generating investors' interest in these companies, analysts said. After touching a peak in July, Cochin Shipyard and HAL stocks have corrected by 55 per cent and 45 per cent, respectively. Bullish Outlook Analysts remain upbeat on the outlook for the defence sector. 'The biggest change is that the order books (for defence companies) have improved. We are also getting export orders. These are the factors driving stock prices of defence companies,' Geojit Investment's Anil said.
