Even as the headline indices are trading lower after record high levels scaled yesterday (April 1, 2024), Nifty Realty marked its all-time high today of 950.85. On a year-to-date basis, the index has risen by a sharp over 21 per cent, while over one year, the index zoomed 143 per cent.

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Of the 10 stocks constituting the index, 8 shares traded with gains, while two blinked in the red. Prestige Estates Projects was up over 5 per cent at Rs 1,330.7, while other stocks, including the likes of Godrej Properties, Oberoi Realty, and The Phoenix Mills, traded with gains between 1-3 per cent.

Meanwhile, global brokerage Morgan Stanley is of the view that relative outperformance in real estate companies can be attributed to pre-sales momentum. Accordingly, the brokerage has raised the target price for real estate companies considering revised pre-sales. 

Stock
 New rating  Previous rating  New target price  Old target price
DLF Equal Weight Overweight Rs 900 Rs 770
Godrej Properties Overweight Equal Weight Rs 2500 Rs 2050
Macrotech Developers Equal Weight Equal Weight Rs 1050 Rs 960
Prestige Estates Projects Overweight Overweight Rs 1400 Rs 130

Also, the brokerage has slashed the sector’s FY25 guidance to 10-20 per cent year-on-year (YoY) as against the actual growth of 30-40 per cent logged in the previous fiscal year. Besides, the foreign brokerage maintains that as pre-sales momentum slows, the market will likely focus on RoE, i.e. return on equity. 

In terms of pre-sales on a year-over-year basis, the brokerage sees Prestige Estates and Godrej Properties as having faster growth. Conversely, on the RoE front, Macrotech Developers and Oberoi Realty rank better. 

Also, on the sidelines a report by