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Which Indian real estate stocks should you buy now

Mar 12 2012 | 0 Comments | 1547 Views

These are gloomy times for Indian real estate and profit of big players (DLF and Unitech) have dropped close to 50% year over year(y-o-y) and BSE realty index has dropped 18% from February 21, 2012. However the difficult times often present unique opportunities to make good investment for the long run. Key factors to consider:

·         Presence in markets with better absorption in residential and commercial properties (Shobha Developers and Prestige Estate are Bangalore based where these condition holds true)

·         Healthy annuity income (e.g. rental income from malls, as the retail sector remains healthy). A case in point Phoenix mills in Mumbai whose y-o-y profit has gone up by 13%

·         Low debt to equity ratio and recent land acquisition (Sunteck realty)

Read more at  http://tinyurl.com/7myyads

Other news highlights:

The Plight of DLF

Veritas Investment Research claims that DLF is a ?crumbling Edifice? and the stock is only worth Rs. 100 only (DLF is currently trading above Rs. 200). The more pertinent question: ?Is DLF a representative case of the wider problem facing the Indian real estate sector??  Let?s look at the Negative factors against DLF:

·         Localized focus in inherently speculative Gurgaon market

·         Spectacular promotion of new projects that have gone bust in the past

·         High debt exposure to the extent of Rs. 22,000 crores, and problem in servicing interest payment

Other major real estate companies share the concentration problem of DLF but the debt situation is not as bad for the industry as a whole. So there is still reason to be cheerful.

Read more at  http://tinyurl.com/6vuvxb5

World Bank Revises Indian Economic Growth to 7-7.5% in 2012-13

The estimate is higher than 6.8% projected for 2011-12. Indian economy grew at 8.4% during fiscal year 2010-11, but tighter monetary policy and global economic weakness has adversely affected the outlook.

Read more at  http://tinyurl.com/6wj3azq

Morgan Stanley Invests in Indian real Estate

Morgan Stanley Real Estate Investment (MSREI) has invested $90MM  in Mumbai-based realtor Sheth Developer?s project in part debt-equity form. Morgan Stanley has invested $750MM till date and expects to invest another $200MM by the end of this year.

Read more at http://tinyurl.com/73por4o


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