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Economic Times
2 days ago
- Business
- Economic Times
Luxury development boom stokes jump in Indian real estate shares
A rally in India's real estate stocks is gaining momentum, driven by optimism that robust residential pre-sales and a boom in luxury housing projects will bolster investor confidence. ADVERTISEMENT A gauge of local property shares have surged more than 25% from an April low, putting the sector on track to outperform the benchmark Nifty 50 Index for a fifth straight month in July. The rebound follows a sharp selloff earlier this year amid concerns about a slowing economy. Investors are betting on a turnaround in India's property market with developers set to report a record 447 billion rupees ($5.2 billion) in pre-sales in the first quarter, according to a July 7 report from Kotak Institutional Equities. Upcoming new launches from DLF Ltd., Prestige Estates Projects Ltd. and Lodha Developers Ltd. are adding to stronger sentiment. 'We believe tier-1 developers with strong balance sheets and diversified portfolios should continue to benefit from the structural long cycle positive demand trends in India,' Harsh Wardhan Modi, an analyst at JPMorgan Chase & Co., wrote on said it sold 110 billion rupees worth of luxury homes within a week of launch in June, while Prestige notched an all-time high sales bookings in the quarter. While shares of the two are down year to date, they're more than 35% higher since bottoming out in April. ADVERTISEMENT 'Many developers in our coverage have less than one year of unsold inventory and strong balance sheets, giving them pricing and staying power,' HSBC Holdings analysts including Puneet Gulati wrote in a recent note. Still, concerns over aggressive new project launches and the risk of oversupply are weighing on future growth. Questions about whether the property cycle has peaked and if the pace of sales will continue has prompted some investors to take now, they're turning their attention to upcoming earnings season scheduled to kick off later this month. Key areas to watch include whether firms revise guidance upward for fiscal 2026 pre-sales and cash collection, according to Citigroup Inc. analysts. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
2 days ago
- Business
- Time of India
Luxury development boom stokes jump in Indian real estate shares
A rally in India's real estate stocks is gaining momentum, driven by optimism that robust residential pre-sales and a boom in luxury housing projects will bolster investor confidence. A gauge of local property shares have surged more than 25% from an April low, putting the sector on track to outperform the benchmark Nifty 50 Index for a fifth straight month in July. The rebound follows a sharp selloff earlier this year amid concerns about a slowing economy. Investors are betting on a turnaround in India's property market with developers set to report a record 447 billion rupees ($5.2 billion) in pre-sales in the first quarter, according to a July 7 report from Kotak Institutional Equities. Upcoming new launches from DLF Ltd. , Prestige Estates Projects Ltd. and Lodha Developers Ltd. are adding to stronger sentiment. Bloomberg 'We believe tier-1 developers with strong balance sheets and diversified portfolios should continue to benefit from the structural long cycle positive demand trends in India,' Harsh Wardhan Modi, an analyst at JPMorgan Chase & Co., wrote on Friday. Live Events DLF said it sold 110 billion rupees worth of luxury homes within a week of launch in June, while Prestige notched an all-time high sales bookings in the quarter. While shares of the two are down year to date, they're more than 35% higher since bottoming out in April. 'Many developers in our coverage have less than one year of unsold inventory and strong balance sheets, giving them pricing and staying power,' HSBC Holdings analysts including Puneet Gulati wrote in a recent note. Still, concerns over aggressive new project launches and the risk of oversupply are weighing on future growth. Questions about whether the property cycle has peaked and if the pace of sales will continue has prompted some investors to take pause. For now, they're turning their attention to upcoming earnings season scheduled to kick off later this month. Key areas to watch include whether firms revise guidance upward for fiscal 2026 pre-sales and cash collection, according to Citigroup Inc. analysts.
Business Times
3 days ago
- Business
- Business Times
Luxury development boom stokes jump in Indian real-estate shares
[NEW DELHI] A rally in India's real estate stocks is gaining momentum, driven by optimism that robust residential pre-sales and a boom in luxury housing projects will bolster investor confidence. A gauge of local property shares have surged more than 25 per cent from an April low, putting the sector on track to outperform the benchmark Nifty 50 Index for a fifth straight month in July. The rebound follows a sharp sell-off earlier this year amid concerns about a slowing economy. Investors are betting on a turnaround in India's property market with developers set to report a record 447 billion rupees (S$6.7 billion) in pre-sales in the first quarter, according to a Jul 7 report from Kotak Institutional Equities. Upcoming new launches from DLF, Prestige Estates Projects and Lodha Developers are adding to the stronger sentiment. 'We believe tier-1 developers with strong balance sheets and diversified portfolios should continue to benefit from the structural long-cycle positive demand trends in India,' Harsh Wardhan Modi, an analyst at JPMorgan Chase, wrote on Friday. DLF said it sold 110 billion rupees worth of luxury homes within a week of launch in June, while Prestige notched an all-time high in sales bookings in the quarter. While shares of the two are down year to date, they are more than 35 per cent higher since bottoming out in April. 'Many developers in our coverage have less than one-year of unsold inventory and strong balance sheets, giving them pricing and staying power,' HSBC Holdings analysts including Puneet Gulati wrote in a recent note. Still, concerns over aggressive new project launches and the risk of oversupply are weighing on future growth. Questions about whether the property cycle has peaked and if the pace of sales will continue has prompted some investors to take a pause. For now, they are turning their attention to the upcoming earnings season scheduled to kick off later this month. Key areas to watch include whether firms revise guidance upward for fiscal 2026 pre-sales and cash collection, according to Citigroup analysts. BLOOMBERG
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Business Standard
10-07-2025
- Business
- Business Standard
Traders watch expiry day moves after Sebi ban on Jane Street Group
The benchmark NSE Nifty 50 Index opened little changed, with its biggest components - HDFC Bank Ltd., Reliance Industries Ltd. and ICICI Bank Ltd. - barely moving Bloomberg By Chiranjivi Chakraborty and Ashutosh Joshi Traders scrutinizing India's derivatives market watched for signs of unusual trading on the first major expiration day following a ban on Jane Street Group. The benchmark NSE Nifty 50 Index opened little changed, with its biggest components — HDFC Bank Ltd., Reliance Industries Ltd. and ICICI Bank Ltd. — barely moving. While it closed down 0.5%, the India NSE Volatility Index ended at its lowest level since April 2024. Nifty 50 options trading was the lowest for an expiration day since May 29 but in line with the average volume for this year's expiries, data compiled by Bloomberg show. Investors have been waiting for this day to see if the Securities and Exchange Board of India order released last Friday would have any impact on the market. It's on Thursdays that about half of the nation's equity-derivatives expire — a day at the center of Jane Street's lucrative strategy that SEBI called market manipulation. The US giant has denied the allegations, saying it was deploying common arbitrage trades. Investors are being careful given SEBI's 'strong vigilance,' said Tejas Shah, head of equity derivatives at Equirus Securities in Mumbai. 'No players would want to enter their bad books,' he added. More clarity on the impact of the Jane Street ban may emerge when the nation's leading bourse, the National Stock Exchange of India Ltd., releases its daily report on options prices later. Nimish Maheshwari, an analyst with Beat The Street who publishes on the Smartkarma platform, said he expected a 20% to 30% drop in options volume on weekly contracts relative to previous expiries as large trading firms are holding off deploying strategies similar to Jane Street's. On Tuesday, when the less liquid options on the BSE Sensex Index expired, volume remained in line with previous expirations. That said, the cost of the contracts traded on the BSE Ltd. exchange was 4% below the previous expiration and 28% lower than the eight-week average excluding month-end Tuesdays, according to a note from brokerage Ambit Capital. SEBI has been cracking down on derivatives trading after a 40-fold growth turned India into the world's biggest market for the contracts, with retail investors losing billions of dollars on the bets. While the cubs have tamed down trading, their losses have worsened, a report from the regulator showed earlier this week.
Mint
10-07-2025
- Business
- Mint
To change the world, India Inc must stop hoarding cash and take more risks
Gift this article India Inc is sitting on an unprecedented mountain of cash. A Mint analysis of 285 listed entities (excluding banking, finance and insurance companies, which have some statutory cash requirements) showed their cash and cash equivalents grew to ₹ 5.09 trillion in FY25, up 12% year-on-year. To put it in perspective, that's nearly thrice the country's total outlay for capital expenditure on defence services. India Inc is sitting on an unprecedented mountain of cash. A Mint analysis of 285 listed entities (excluding banking, finance and insurance companies, which have some statutory cash requirements) showed their cash and cash equivalents grew to ₹ 5.09 trillion in FY25, up 12% year-on-year. To put it in perspective, that's nearly thrice the country's total outlay for capital expenditure on defence services. What's more, this tendency to hoard cash isn't new. According to the analysis, the ratio of cash to total assets for these 285 companies grew from 8.4% in FY19 to a high of 32.1% in the covid year of FY21 (understandably so) before dropping. In FY25 it was 11.8%, still substantially higher than the pre-covid level of 8.4%, logged in FY19. The bigger they are, the harder they hoard If we expand the analysis to the 500 companies that form the Nifty 500 Index, the picture becomes even more stark. These 500 companies are (with a few exceptions) arguably India's largest, most valuable, successful, globally integrated and globally competitive businesses. They are all also highly profitable. And they are all ploughing those profits largely into cash reserves. For the Nifty 500 companies, cash and cash equivalent reserves hit ₹ 17.5 trillion in FY25, up 17% year-on-year, easily surpassing the 12% increase in FY24. What's more, India's biggest companies are sitting on the most cash. In FY25, the combined cash and cash equivalent reserves of just five companies – Reliance Industries, Larsen & Toubro, Tata Motors, Infosys, Wipro and Tata Consultancy Services stood at ₹ 3.38 trillion. Reliance alone accounted for two-thirds of this, with a cash pile of ₹ 2.25 trillion. This mountain of cash is due to extraordinary growth in profits as measures to rationalise costs and operations put in place after the pandemic have started to bear fruit. According to NSE's Corporate Performance Review for FY25, just the top 50 companies, represented by the Nifty 50 Index, recorded profits of ₹ 8.4 trillion in FY25, marking 5.5% growth over the previous year. Cash for cash's sake But this money is not being used to build capacity, create or grow into new markets, acquire businesses, invest in research & development, or even reward shareholders. It's simply sitting on companies' balance sheets. According to a report by Nuvama Research, India Inc's capex growth slowed to around 6-8% in FY25 from 20% in FY24. Automobiles and tractors maker Mahindra & Mahindra grew its cash reserves by 66% in FY25 but added only 12% to fixed assets; L&T grew cash reserves by 32% in the same period but added only 0.2% to fixed assets; Infosys added 32% to cash but just 5% to fixed assets; and so on. Actually, all this should not come as a great surprise. India Inc has historically been risk-averse. Other than IT services firms, Indian companies have largely chosen the relative security of the domestic market over bold international bets. Even IT services has played it safe, having failed to make the shift from offshore services to products. Back in 2015, Infosys was one of a handful of companies that donated to OpenAI, whose ChatGPT would just a few years later turn the technology world on its head. That was under the leadership of its then CEO Vishal Sikka. But Sikka soon stepped down owing to differences with Infosys's powerful founders led by NR Narayana Murthy, and that early and prescient bet never paid off. Instead, Microsoft stepped in with a $1-billion investment in the now for-profit OpenAI. Infosys has been left playing catch-up, partnering with Microsoft to develop AI solutions, as well as the leader in AI hardware, Nvidia. Risk it for the biscuit In one of P.G. Wodehouse's classic novels, his immortal characters – the amiable aristocrat Bertie Wooster and his 'gentleman's personal gentleman' Jeeves – are forced to become bookies for a while. Jeeves is, in particular, extremely successful at this, enticing punters with his pitch: 'You can't accumulate if you don't speculate!" Speculation – or risk-taking – is fundamental to business. Risk and reward are intrinsically linked; the greater the risk, the greater the reward. An extreme example of risk-taking was when FedEx promoter Fred Smith faced closure after failing to secure a bank loan. He went to Las Vegas with $5,000 of the company's remaining cash and won enough by gambling to keep it going. When he died last month, Smith was personally worth more than $6 billion. But business risk is not like outright gambling. It is the ability to take a calculated risk where others failed to see opportunity. Apple had a successful computer business but bet big on smartphones, and is now one of the world's most valuable and influential companies. In 2006, when video streaming was in its infancy, Google acquired YouTube for a then-substantial $1.65 billion. In 2024, YouTube alone generated more than $36 billion in revenue for Alphabet. There are no similar bold bets in India Inc's history, other than perhaps Tata's Corus and Jaguar-Land Rover buys in 2007 and 2008. There is no true Indian multinational. There is no Indian company with a genuinely global brand. What they have instead is heaps of cash. Topics You May Be Interested In
