Nifty realty rises to all-time high as Morgan Stanley raises target price of Godrej, Prestige Estates and others

Realty stocks bucked the market trend and inched higher on April 2 after Morgan Stanley raised target prices of Prestige Estates, Godrej Properties and some stocks.

The Nifty realty index surged 2 percent to hit an all-time high of 959.1, led by gains in Prestige Estates, Godrej Properties, Oberoi Realty and Phoenix Mills against a 0.3 percent fall in the benchmark Nifty. Barring DLF, all other nine index constituents traded higher.

Nifty realty has surged over 21 percent this year, so far, against a 3 percent rise in the Nifty.

Follow our live blog for all the market action

Brokerage Morgan Stanley upgraded Godrej Properties to “overweight” from “equal weight” and hiked the target price to Rs 2,500 from Rs 2,050 based on pre-sales momentum.

Analysts also raised the target price of Macrotech Developers to Rs 1,050 from Rs 960 while sticking to “equal weight” call. Prestige Estates target price was raised to Rs 1,400 from Rs 1,300, with an “over weight” rating.

DLF was downgraded to “equal weight” from “overweight” but the target price was raised to Rs 900 from Rs 770.

ALSO READ: Institutional investments in real estate down 40% to $995 million in January-March: Report

Morgan Stanley analysts expect real estate sector’s relative outperformance to be driven by pre-sales momentum. However, they expect FY25 growth to moderate to 10-20 percent year-on-year (YoY) from FY24’s actual growth of 30-40 percent.

“As the pre-sales momentum slows, the market is likely to focus on return on equity (RoE), where Macrotech and Oberoi Realty is expected to fare well,” they added.

In terms of pre-sales on a YoY basis, the brokerage sees Prestige Estates and Godrej Properties to have a faster growth compared to their peers. On the RoE front, Macrotech Developers and Oberoi Realty are expected to rank better.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.