Nifty Realty springs 4% as developers register record provisional sales

Record provisional sales posted by several real estate developers during the March quarter triggered buying in realty stocks on April 10, driving the Nifty Realty index up nearly 4 percent today. At 12:34pm, shares of DLF, Sobha, Godrej Properties, Macrotech Developers, Oberoi Realty and Brigade Enterprises and were trading 1-8 percent higher.

With several developers posting their business updates, Sobha has achieved its highest-ever quarterly sales value at Rs 1,463 crore, up 3 percent QoQ and 32 percent YoY. It has clocked highest ever annual sales of Rs 5,198 crore, with an average price realisation of Rs 9,200 per square feet. Even Godrej Properties recorded its highest-ever quarterly and annual project deliveries in Q4.

Godrej Properties said its sales growth for the year was on the back of both an improving project mix as well as strong volume growth of 40 percent.

Ajmera Realty & Infra India also reported its best ever yearly sales performance clocking 93 percent growth in FY23. The company said its sales reached Rs 834 crore, while collection stood at Rs 532 crore.

Jefferies highlighted in a note to its clients that data from property consultants and visibly high activity in the premium housing market suggested that most of listed developers would witness record pre-sales in the March quarter.

Though it is of the view that affordable segment could be slowing down as it bears the brunt of higher mortgage rates. The inventory is at an 11-year low which supports the sector fundamentals and as rates peak soon, valuations are also likely to bottom where Godrej Properties, DLF and Lodha are better placed, it added.

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The global brokerage firm sees developers with higher premium component like DLF, Oberoi Realty and Sobha, reporting higher YoY sales growth.

Mumbai-based Macrotech Developers, which sells homes under the Lodha brand, saw its sales bookings rise 34 percent to a record Rs 12,064 crore in the last fiscal, on better demand despite rise in interest rates on home loans.

Analysts believe RERA-driven consolidation is throwing up growth opportunities for organised players.

The real estate sector was reeling under pressure due to high inflation, mortgage rates and increasing input costs. Plus, the hike in interest rates by the Reserve Bank of India added to woes faced by the developers. However, the recent rate hike pause by the central bank has improved sentiment for the sector.