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Real Estate stocks rise on Budget expectations
| February 16, 2009 |  (Be the first to rate this story!) Loading ... |
Most of the real estate stocks were trading firm Monday on expectations of another government stimulus package for the economy and amid hopes of rate cuts amidst fall in inflation.
BSE Realty index was the key gainer amongst other indices, followed by auto. It was trading up at 2.8%. Meanwhile, the Sensex was marginally down 80 points or 0.84% at 10.30 a.m.
Market analysts are hoping that there might be some tax sops in the forthcoming interim budget to be presented today along with sector-specific stimulus package.
Real estate stocks like Mahindra Life, Ansal Infra, HDIL and DLF were trading higher 12%, 4.5%, 4.4% and 3.5% respectively while Orbit Corporation, Unitech, Sobha, Parsvnath were up between 2% and 4%.
Most of the analysts continue to maintain a bearish stance on the Indian real estate sector. “Given the liquidity crunch plaguing the industry, fears on corporate governance and weak underlying fundamentals, we continue to maintain our near term bearish outlook on Indian realty. Strapped for cash but unwilling to drop prices to generate cash flows, developers are now hoping that the banks will help bail them out of their near term liquidity crisis. We believe realty stocks shall continue to remain under pressure until the liquidity issues get resolved,” said Chirag Negandhi, real estate analyst at Enam Securities.
The brokerage, however, continues to remain bullish in the long run wherein falling interest rates and capital values shall re-ignite industry volumes, propel revenue growth and increase liquidity. It believes that for those willing to act contrarian, with a long term view, DLF, with its superior & flexible business model, relatively low gearing and large execution bandwidth, remains best placed to lead the next sector rally.
At CMP of Rs 140, the stock trades at a 34% discount to its NAV of Rs 212. Enam has maintained sector Outperformer rating with a revised price target of Rs 212 on the stock.
News Published Under: Real Estate India |
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