UBS has initiated coverage on key players in the Indian real estate sector, driven by optimism about a sustainable upcycle supported by multiple tailwinds across residential, commercial, and luxury segments. The brokerage has initiated a ‘Buy’ rating on DLF Ltd. and Prestige Estates Projects Ltd., while assigning a ‘Neutral’ rating to Oberoi Realty Ltd. Below are the specific details:
- DLF Ltd.: UBS has initiated a ‘Buy’ with a target price of ₹1,005. The brokerage highlights DLF’s leadership in the luxury real estate segment, making it a key beneficiary of the sector’s recovery.
- Prestige Estates Projects Ltd.: UBS assigns a ‘Buy’ rating with a target price of ₹2,175. The firm is appreciated for its strong diversified portfolio and nationwide presence.
- Oberoi Realty Ltd.: UBS initiates with a ‘Neutral’ rating and a target price of ₹2,230, recognizing Oberoi as a significant player in the Mumbai market but noting its limited diversification compared to peers.
Key Drivers for the Sector
- Residential Growth: UBS highlights that residential real estate is benefiting from multiple tailwinds, including rising income levels, urbanization, and improved affordability.
- Commercial Recovery: With COVID-19-related uncertainties easing, the commercial real estate sector is witnessing renewed demand, particularly in office spaces.
- Luxury Segment: UBS positions DLF as the leading player in this segment, while Prestige’s diversified offerings across residential and commercial properties add robustness to its growth outlook.
Sectoral Outlook
The real estate sector is witnessing a structural recovery post-COVID, driven by favorable government policies, declining interest rates, and increasing consumer preference for home ownership. UBS believes that this recovery will benefit companies with strong execution capabilities and diversified portfolios. Investors will closely watch these stocks for their ability to capitalize on these opportunities.
