Global brokerage firm Morgan Stanley has raised target price of leading realty stocks with a bullish outlook as it expects a multi-year upcycle in the sector.
Demand supported by a robust macro and positive industry structure could provide a multi-year upcycle in the real estate sector, global brokerage Morgan Stanley said. However, meaningful downsides exist as well, it added.
The industry upcycle started in 2021 in terms of average selling price (ASP) growth and could continue with the help of a strong macro and favourable industry structure, the financial services firm said in a note.
A favourable industry structure could be defined as lower leverage, industry consolidation, and measured price increases.
The brokerage house has raised the target price of leading realty stocks such as DLF, Prestige, Macrotech Developers, Godrej Properties and Oberoi Realty.
Morgan Stanley has "overweight" ratings for DLF and Prestige stocks. It has increased the target price of DLF to ₹770 from ₹549 apiece, and increased Prestige's target to ₹1,300 from ₹524 per share.
It has 'equal-weight' ratings for Macrotech Developers and Godrej Properties. The target price of Macrotech Developers has been increased to ₹960 from ₹572 per share and that of Godrej Properties has been increased to ₹ 2,050 from ₹1,354 apiece.
In contrast, Morgan Stanley has downgraded its rating on Oberoi Realty to "underweight", although it raised the target price for the stock to ₹ 1,180 from ₹885 apiece.
Last month, Prashant Thakur, regional director and head of research at Anarock Group, stated that the recent surge in property prices was partly a catch-up from seven stagnant years pre-COVID, where the industry was flat and prices didn't rise.
While affordable housing (under ₹40-45 lakhs) is still struggling, the real market activity is in the ₹80 lakh to ₹1.5 crore range, predominantly in the top seven cities, he stated.
Shares of DLF were trading 2.45% higher at ₹666.1 apiece on BSE at 10:12am, while shares of Macrotech Developers were trading 0.15% higher at ₹919.05 apiece on BSE. Godrej Properties shares were 0.37% up at ₹1,936.4 apiece on BSE while Oberoi Realty shares were trading 0.79% lower at ₹1,435.15 apiece on BSE.
(Edited by : Shloka Badkar)
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