Investing in Indian real estate stocks presents an attractive opportunity for capital growth and dividend income. With the right approach that involves careful stock selection, a long-term perspective, and diversification investors can navigate this dynamic market successfully.
These are the stocks that you can consider buying which have a potential upside of up to 30%:
Ahluwalia Contracts Ltd
The shares of this real estate company opened Wednesday’s trading session on a positive note at Rs. 688. The share hit a high of Rs. 741 making a gain of around 9 percent.
Axis Securities one of the well-known brokerage firms, has given a ‘Buy’ target on the company’s stock with a target of Rs. 770 indicating a potential upside movement of around 14 percent from its current market price.
The investment rationale for providing such a recommendation pertains to the company order book of Rs 11,780 Cr (as of 30th June 23). Recently it was awarded two projects worth Rs 832 Cr by Max Healthcare for construction and expansion of hospitals. With this, the total order book now stands over Rs 12600 Cr. The company is also L1 in one project, which is worth Rs 2,840 Cr.
ACIL has completed over 100 plus projects by far and has 40-plus projects ongoing across 16 states. The company is associated with the country’s leading architects and consultants and has also established a strong network of channel partners pan-India. Furthermore, the company exhibits a strong financial position reflected in its debt-free status.
Sobha Developers
The shares of this real estate development company opened its Monday trading session on a positive note at Rs. 844. The share hit an intraday high at Rs. 858 making a gain of around 2 percent.
HDFC Securities one of the well-known brokerage firms, has given a ‘Buy’ target on the company’s stock with a target of Rs. 1,024 indicating a potential upside movement of around 24 percent from its current market price.
The investment rationale for providing such a recommendation pertains to the company’s highest-ever quarterly presales in value and volume at Rs. 17.24 billion. Total collections were Rs.14.5 billion (9%/,7% YoY/QoQ respectively). Gross debt at Rs.20 billion was lower than last quarter. The operating cash flow from completed and ongoing projects is expected at Rs. 36 billion while that from forthcoming projects is at Rs. 73 billion. And, Rs. 2.5 to 3 billion is the expected land capex for FY24.
Marcotech Developers
The shares of the largest real estate developers opened Wednesday’s trading session on a higher note at Rs. 864. The share hit an intraday high of Rs. 871 making a gain of around 1 percent.
IDBI Capital one of the well-known brokerage firms, has given a ‘Buy’ target on the company’s stock with a target of Rs. 1,061 indicating a potential upside movement of around 30 percent from its current market price.
The investment rationale for providing such a recommendation pertains to the Company’s addition of projects with a GDV of Rs. 23 billion during Q2FY24. Over the mid-term, Lodha guides 20 percent growth in pre-sales. In 1HFY24 it has done pre-sales of Rs. 69 billion indicating an upside of 15 percent YoY.
In addition, the Cash flows of the company are healthy which resulted in the balance sheet being lean (debt reduction) and the company is on track to achieve their guidance of debt reduction. LODHA continues to target a 30 percent addition in IRR from JDA projects, and management sees healthy opportunities to acquire projects that can generate a return.
Written By Vaibhav Patil
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