New launches key to achieve sales guidance for real estate players: Antique

Antique expects large-to-mid real estate players to achieve 20 to 30 per cent growth in sales booking

Brokerage firm Antique Stock Broking reckons realty players in the sector could surpass their FY25 guidance and record another stellar performance provided the companies continue launching new projects.

"Almost all the companies need new launches to achieve their guidance or 25 per cent year-on-year (Y-o-Y) sales booking growth," Antique said. It expects new launches to gain momentum in the second half of the current financial year (H2FY25).

Among others, Century Textiles, Prestige Estates, Brigade Enterprises, Godrej Properties, and Kolte-Patil, have sales booking/ unsold inventory of more than 100 per cent and are heavily dependent on new launches to achieve 25 per cent growth guidance.

 

Further, Sobha, Sunteck, and Arvind Smartspaces too are largely dependent on launches to meet their guidance with sales booking/ unsold inventory at 50 per cent to 87 per cent.

Whereas, Macrotech Developers (Lodha) and Oberoi Realty are the least dependent on new launches to meet their sales booking/ unsold inventory guidance of 22 per cent to 37 per cent.

Bengaluru-based players at risk

Antique Broking said the key risk to look out for will be launches in Bengaluru, which is facing challenges in terms of approvals.

"Companies with a significant proportion of launches in Bengaluru face the risk of delay in launches or increased costs," the brokerage said.

Sobha has a major exposure of around 60 per cent of its total incremental launch value to the Bengaluru market, Brigade Enterprises has 40 per cent exposure, Century Textiles has 38 per cent, Arvind Smartspaces has 28 per cent, Prestige Properties has 24 per cent, and Godrej Properties has 18 per cent.

Nonetheless, the brokerage expects large players to do over 20 per cent to 25 per cent growth whereas mid-caps are expected to do more than 30 per cent growth in sales booking in FY25.

Analysts also expect realisations to grow on account of premiumisation but expect price escalations to moderate.

What should investors do?

Century Textiles continues to be the brokerage's top pick with a 'Buy' rating and a target price of Rs 3,470, followed by Oberoi Realty with a 'Buy' rating and a target of Rs 2,107.

On Godrej Properties the brokerage has a 'Buy' call with a target of Rs 3,667 and Sobha also has a 'Buy' rating with a target of Rs 3,003 per share.