GST, RERA to benefit listed real estate companies. Here are 2 stocks to bet on
Mid cap companies are quoting at reasonable valuations. In addition to strong real estate developers, companies that are into construction of buildings will also benefit from the expected shift to the organised sector.
Also read: New real estate projects: Checklist for homebuyers
A large number of listed real estate players makes the investment easier. “In addition to the large unorganised sector (around 90%), valuations of strong listed real estate players are also at reasonable levels now,” says Anil Sarin, CIO -Equities, Centrum Broking.
These two mid-cap stocks are highly recommended by analysts
Ideally, strong real estate players such as Godrej Properties and Mahindra Lifespace Developers should benefit from the expected consolidation. However, the stock market has already factored this in and therefore, the upside potential for these stocks is not much. However, mid cap companies like Brigade Enterprises are still quoting at reasonable valuations. In addition to strong real estate developers, companies like Capacite Infraprojects that are into construction of buildings will also benefit from the expected shift to the organised sector. With an order book close to 5.5 times its revenues, Capacite also has very clear revenue visibility.
“Their order book is now well balanced between private and govt clients now and this diversification lowers the risk premium,” say a recent HDFC Securities report.