Below we have provided a link to an 88 page report from ENAM Research (don't fret it's mostly charts and graphics) on the state of India real estate. There is also a detailed analysis of the leading developers in India.
Report Summary |
Much gain after some immediate pain Robust long term opportunity Combination of demographics and income growth to continue to catapult demand However, short term conditions unfavourable Dampened affordability, rising interest rates and oversupply to play spoilsport in the near term |
Current valuations: On blue sky scenario Valuations do not factor near term concerns Inevitable execution delays and lack of easy access to capital to lower projected RoEs Subdued demand and the resultant price correction in the short term to affect project IRRs Focus to shift from owning land to execution Owning land -> Actual Execution -> Cash flows Stock prices to remain volatile due to the current expectation-reality mismatch |
Recommendations: Attractive entry points ahead Stock prices expected to correct to reflect current unfavorable conditions We recommend entry at lower levels to benefit from the secular growth opportunity Initiating coverage on the following companies Outperformer: Parsvnath Developers, Anant Raj Neutral: Unitech, Sobha Developers, Akruti Nirman Underperformer: DLF, Peninsula Land |
As you can see, the long term opportunities are fantastic, while the road there may be bumpy.
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