Remain bullish on the real estate sector going forward: Prashasta Seth

In a chat with ET Now, Prashasta Seth, CEO, IIFL AMC, shares his views on the real estate sector. Edited Excerpts:

ET Now: The broader markets are outperforming. We have seen the FDI norms in construction ease yesterday. The stocks took a bit of a leg up as well. How incrementally positive for real estate as well as the pure play construction stocks?

Prashasta Seth: There are two or three factors going for those construction stocks. One is obviously the FDI norms improving. Second, there is a sense that the order inflow for these companies should improve significantly over the course of the next 12 months. You might see a lot more tendering especially on the road side which will benefit these companies. The third thing is that you would see a fall in interest rates now when 10-year G-Secs are pointing to that. Lot of these companies have fairly decent loan on their books.

So your PAT expansion could be significantly higher. The EBITDA margins might expand but the PAT could see a much more disproportionate increase in terms of the percentage number. So those two or three factors could be very very positive for companies in these.