UBS initiates coverage on realty stocks; sees 18-26% upside in DLF & Prestige Estate

The real estate sector has been gaining significant traction, as reflected in the strong performance of the BSE Realty Index, which has surged over 40% in the last year. The index rose by nearly 2% in November 2024, outperforming the Sensex, which gained just 0.5%. This robust momentum has prompted brokerage firms to initiate coverage on the sector, driven by sustained buying interest.

The Nifty Realty Index is up 8% in FY25 YTD, outperforming the broader market indices by 4%. “This momentum is likely to sustain, due to mega ongoing and upcoming project launches (>INR 1.2 tn) across key markets and segments by industry leaders that are positioned to garner stellar demand, as per our checks,” Elara Capital said in a report.

UBS has highlighted the sector's potential, identifying a sustainable upcycle fueled by multiple tailwinds.



The residential segment is expected to benefit from strong volume growth, while the commercial segment has seen COVID-related uncertainties ease significantly.

Key real estate stock ratings

UBS has initiated coverage on prominent players in the real estate sector, highlighting the diverse opportunities they present.

DLF: UBS has given a Buy rating to DLF with a target price of Rs 1,005, representing an 18% upside from the last traded price (LTP) of Rs 849. The brokerage identifies DLF as the best play in the luxury segment, benefiting from premium developments and robust demand.

Prestige Estate: A Buy recommendation has also been given for Prestige Estate, with a target price of Rs 2,175, reflecting a potential 26% upside from its LTP of Rs 1,718. UBS highlights Prestige's diversified portfolio, which positions it well to capture growth across segments.

Oberoi Realty: UBS has initiated a Neutral rating for Oberoi Realty with a target price of Rs 2,230, indicating a 7% upside from its LTP of Rs 2,069. The company is seen as a strong player in the real estate sector.

(With inputs from ETNow)

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