Real Estate Shares to Buy: The second wave of Corona has had a profound effect on the real estate industry. However, now the economic pace that has slowed down due to Corona is gaining momentum again and now domestic real estate developers are expecting a boom in the realty sector. According to global brokerage and research firm CLSA, real estate developers aim to double their sales figures in the next three to four years. The industry will benefit from strong demand, affordability and industry consolidation. Apart from this, developers are also setting a target to reduce their debt and in the last financial year they have reduced debt by 27 percent. Looking at the positive outlook of the realty sector in the long run, CLSA has chosen to buy three stocks of this sector, that is, investors can earn profits by investing in these stocks. CLSA preferred growth focused, healthy profitability and prudent capital allocation to select stocks.
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DLF- Target Price Rs 350
In this year 2021, the share price of DLF has increased by 22 percent and at present it is at a price of Rs 291 per share. According to CLSA, due to the second wave of Corona epidemic, there was a big decline in the sales of the company but it improved sharply in June last month. Despite the second wave of Corona, DLF is confident about the target of selling 4 thousand crores in the current financial year 2022. The company has increased the prices by about 20 per cent in the second phase of the Independent Floors project and the market has absorbed the increase. According to CLSA, the projects of DLF are completed which will generate cash flow. As per CLSA, the cost will be managed and will be cash-neutral in the first year when a new product is launched but will become cash-positive in the second year. Regarding investment, CLSA has set a target of 20 percent i.e. Rs 350.
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Prestige Estates Projects – Target Price Rs 370
The company has set a target of pre-sales of Rs 6500 crore in this financial year 2022 and has set a target of Rs 8-10 thousand crore for the next three to five years. According to CLSA, the business of Prestige Estates was affected during the second wave of Corona but sales were higher compared to the same quarter last year. Despite the slow first quarter of the current financial year, due to the company’s vaccination and increasing demand in cities like Mumbai, the company expects to achieve 20 percent sales growth in FY 2022. Shares of Prestige Estates have jumped up to 10 per cent this year and are currently trading at a price of around Rs 290. CLSA has set a target of 29 percent more about Rs 370 for investment.
Sunteck Realty- Target Price Rs 425
The company is working on plans to start new projects and phases in Vasai, Vasind and Naigaon in the current financial year. The main goal of the projects is to provide affordable houses to the middle class people. According to CLSA, the company anticipates that its ready inventory will increase its cash and this will reduce debt and associated costs. Shares of Sunteck Realty have fallen up to 7 per cent this year and are trading at a price of around Rs 328. CLSA has set a target of 35 percent more about Rs 425 for investment.
(Article: Kshitij Bhargava)
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