HSBC and Citi have shared their latest insights on the real estate sector, focusing on balance sheets, free cash flow trends, and stock preferences.
HSBC’s key takeaways:
- Ongoing projects now contribute 40-50% of the total enterprise value (EV) of real estate companies.
- Free cash flows remain largely positive, even without future sales.
- Balance sheets are strong, with prospective margins expected to be higher.
Citi’s real estate outlook:
- Oberoi Realty and Prestige Estates: Citi has issued a ‘buy’ call on these stocks, citing strong fundamentals and growth potential.
- DLF: Rated ‘neutral’, as near-term price corrections reflect pre-sales risk factors.
- Sobha: Assigned a ‘sell’ rating, with concerns over valuation and market positioning.
- Phoenix Mills: Remains Citi’s top pick, benefiting from organic consumption growth of 7-9% in its mature malls and the expansion of new malls across India.
Citi believes that while short-term price corrections are factoring in risks, certain players are well-positioned for sustained long-term growth in India’s real estate market.
Disclaimer:
The information provided in this article is for informational purposes only and does not constitute financial or investment advice. Stock market investments are subject to risks, and past performance is not indicative of future results. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions. Business Upturn and its affiliates do not guarantee the accuracy, reliability, or completeness of the market data provided.