Nifty Realty surges over 3% to post biggest single-day gain in six months

Stock market today: Indian markets staged a sharp recovery on Friday, November 22, fueled by value buying at lower levels and a rally in top stocks. Despite no fundamental changes or new catalysts, investors saw the recent sharp decline in Indian equities as an opportunity to enter the market, leading the frontline indices to gain over 2%.

Real estate stocks also saw strong demand from investors today, with the Nifty Realty index posting a gain of 3.17% – the biggest single-day gain in the past six months. Nine of the index’s ten components closed on a positive note, with Raymond leading the way, rising nearly 16%.

The jump came as the company received a No Objection Certificate (NOC) from the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) for the demerger of its real estate business, as announced in its stock exchange filing on November 21. .

Post-demerger, the new company, Raymond Realty Limited (RRL), will be listed on both stock exchanges after obtaining necessary approvals.

Meanwhile, Sobha emerged as the second-best performer in the index, with a gain of 7.4% and a range ₹1,629.30 per share, after domestic brokerage firm Investec initiated a hedge on the shares with a target price of ₹2,150 each.

Investec highlighted that Sobha has benefited from strong demand and higher realizations in Bengaluru, along with consistently healthy operating cash flow (OCF) and reduced balance sheet debt.

Other stocks such as Phoenix Mills, Godrej Properties, DLF, Mahindra Lifespace Developers, Oberoi Realty, Brigade Enterprises and Macrotech Developers closed with gains ranging between 1% and 6.1%.

Commenting on the current market performance, Vinod Nair, Head of Research, Geojit Financial Services said, “The market witnessed a significant broad-based rally from the oversold territory, mainly led by large cap stocks as their valuations looked attractive with expectations of improvement in corporate profits in the second half of the fiscal year.”

“Positive momentum was also observed in global markets, driven by a modest decline in Japanese inflation in October and the 39 trillion yen stimulus package. Moderation in the global and domestic political drama provided relief for the domestic market,” he added.

Healthy performance achieved in the second quarter

Real estate companies delivered a healthy performance for the quarter ended September, fueled by a steady rise in housing demand, with companies like Godrej Properties reporting a five-fold increase in their consolidated net profit.

The steady increase in demand for housing projects has also prompted companies to increase ₹12,801 crore through Qualified Institutional Placements (QIP) between January and September, according to Anarock’s latest report.

The QIP approach allows companies to bypass the traditional initial public offering (IPO) route and quickly raise significant amounts of money.

Companies are optimistic about achieving 20-30% growth in FY25 even on a high base. While they remain confident about the sustainability of demand for years to come, many companies have expressed concerns over approval delays, which could impact their launch timelines and thus their pre-sales targets, according to domestic brokerage firm Motilal Oswal .

In FY24, India’s residential real estate sector achieved a major milestone, crossing the billion square feet turnover mark with a remarkable 20% year-on-year increase, reaching a total of 1.1 billion square feet.

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