Building strong gains: Oberoi Realty, Brigade Enterprises, Mahindra Lifespaces hit 52-week high

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Shares of Godrej Properties, Oberoi Realty, Brigade Enterprises, DLF and Sunteck Realty surged between 1.5-4 percent on September 12, with the Nifty Realty index adding 2 percent. Oberoi Realty and Brigade Enterprises hit a 52-week high of Rs 1,067.80 and Rs 585, respectively on the NSE.

Multiple triggers like the acquisition of land parcels, the commencement of new projects and a favourable growth outlook, are aiding the stocks, ahead of the festive season.

As regards Oberoi Realty, reports suggest that IGE India Pvt Ltd has bought two luxury apartments overlooking the sea, spread across an area of 16,000 sq ft in Mumbai’s Oberoi Three Sixty West for Rs 151 crore.

Meanwhile, Sunteck Realty has acquired a posh land parcel of 7.25 acres at Beverly Park, Mira Road under the JDA (joint development agreement) model. The project is estimated to have a development potential of approx 2.5 million square feet of built-up area and a revenue potential of around Rs 3,000 crore, the company said.

The stock gained over one percent in trade and ended the day at Rs 465 apiece.

Mahindra Lifespace Developers, too, is looking to acquire a few land parcels this fiscal to build housing projects with sales potential of Rs 3,000 - 4,000 crore.

In an interview with PTI, the company's CEO Arvind Subramanian said “We are looking to acquire new land parcels for business expansion in three focus cities — Mumbai Metropolitan Region (MMR), Pune and Bengaluru."

The stock opened at Rs 539 on the NSE and later touched its 52-week high of Rs 550.75 apiece.

With the festive season knocking on the door, developers remain optimistic about sales growth. Speaking to CNBC-TV18, Mohit Malhotra, MD & CEO at Godrej Properties said, “Overall, the demand remains strong and momentum is good. We are on track to deliver a very good quarter again.”

“The real estate business is a cyclical industry and one can expect 10 years of a positive cycle. We are just at the beginning of a major bull run in the sector,” said Malhotra, despite home loan rates inching higher.

Analysts, too, remain bullish on the sector. Some analysts from Motilal Oswal Financial Services had recently visited Oberoi Realty’s Three Sixty West project in Worli, to understand the unit offerings as well as the sales and pricing strategy. Tower A houses Hotel Ritz-Carlton up to 33 floors and 28 single-floor residential units over the hotel. Tower B has 170 residential units consisting of 4BHK/5BHK apartments as well as penthouses on top floors.

“We believe healthy cash generation will provide a lot of comfort to the company in seeking aggressive business development opportunities that will provide further growth visibility,” according to Motilal Oswal. It has a BUY rating on the stock with a target price of Rs 1,100.

Global brokerage firm Jefferies is bullish on Sunteck Realty. “We believe Sunteck is on a path to double its pre-sales to Rs 25 bn in three years as the pipeline of new projects built during Covid comes to fruition,” said the firm, initiating a Buy call on the stock with a target price of Rs 621 per share.​

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