Stocks to Buy: Realty stocks to buy for an upside of up to 46%; Recommended by Emkay Global

Synopsis:
Emkay Global has turned bullish on real estate, citing strong housing demand, improved affordability, and healthier balance sheets. It favors Lodha, Sunteck, and Arvind SmartSpaces for their robust growth, rising market share, attractive valuations, and strong cash-flow generation.

Emkay Global has initiated coverage on the Indian real estate sector, highlighting a strong and sustained demand for housing driven by increasing homeownership and improved affordability. This positive demand environment is underpinning growth prospects across the sector, especially among listed developers.

Over the period from FY11 to FY25, the market share of listed real estate developers has doubled to 15%, reflecting consolidation and growing institutional participation in the sector. Within the SMID (small and mid-sized companies)-cap segment, Arvind SmartSpaces and Sunteck Realty stand out due to their robust pre-sales growth, projected at a compound annual growth rate (CAGR) of 25–35% between FY25 and FY28. This growth is supported by a strong pre-existing base and expanding market shares for both companies.

Among large-cap players, Lodha is identified as a key standout, with strong growth visibility and a well-diversified business model that positions it favorably for future expansion. The overall coverage universe reflects healthy operational fundamentals, with operating cash flows reaching 30–60% of collections, which indicates improving cash generation capabilities.

The sector’s balance sheets have strengthened significantly due to focused business development activities over the last 3–4 years. This is evidenced by a 65% reduction in industry net debt from FY17 to FY25, enhancing the financial resilience of companies in this space. 

Valuations are currently attractive, with Arvind SmartSpaces and Sunteck Realty trading at a 10–20% discount to their net asset value (NAV), while Lodha’s stock price also offers an appealing opportunity at present levels.

Lodha Developers Ltd

Lodha Developers is one of India’s largest real estate developers, known for large-scale residential and mixed-use projects across Mumbai, Pune, and London. The company focuses on premium housing, integrated townships, and urban redevelopment, supported by strong execution capabilities and a sizable land bank.

With market capitalization of Rs. 1,11,600 cr, the shares of Lodha Developers Ltd are closed at Rs. 1,117.55 per share, from its previous close of Rs. 1,128 per share. Lodha Developers has a target price of ₹1,500, indicating a 34% upside with a BUY rating.

DLF Ltd

DLF is India’s leading real estate company with a diversified portfolio spanning residential, commercial, and retail properties. Known for landmark developments across Delhi-NCR, DLF has a strong presence in Grade-A office spaces and malls through DLF Cyber City and DLF Avenue, supported by stable rental income from its REIT-backed assets.

With market capitalization of Rs. 1,76,291 cr, the shares of DLF Ltd are closed at Rs. 712.20 per share, from its previous close of Rs. 712.50 per share. DLF has a target price of ₹810, implying a 14% upside and an ADD rating.

Sunteck Realty Ltd

Sunteck Realty is a Mumbai-based luxury and ultra-luxury real estate developer specializing in premium residential projects. The company is known for its high-end developments in Bandra-Kurla Complex, Oshiwara District Centre, and other key micro-markets, focusing on quality, exclusivity, and strong brand positioning.

With market capitalization of Rs. 6,124 cr, the shares of Sunteck Realty Ltd are closed at Rs. 418.10 per share, from its previous close of Rs. 420.90 per share Sunteck Realty has a target price of ₹610, suggesting a 46% upside and a BUY rating.

Arvind SmartSpaces Ltd

Arvind SmartSpaces, part of the Arvind Group, focuses on residential, commercial, and plotted development projects across Ahmedabad, Bengaluru, and Pune. The company is known for modern urban planning, customer-centric designs, and consistent growth in the mid-housing and plotted development segments.

With market capitalization of Rs. 2,804 cr, the shares of Arvind SmartSpaces Ltd are closed at Rs. 611.45 per share, from its previous close of Rs. 610.20 per share. Arvind SmartSpaces has a target price of ₹850, reflecting a 39% upside with a BUY rating.

Oberoi Realty Ltd

Oberoi Realty is a premium real estate developer based in Mumbai, recognized for its high-quality residential towers, commercial spaces, and retail developments. With a reputation for superior construction and timely delivery, the company has built strong brand equity, especially in Mumbai’s Western suburbs.

With market capitalization of Rs. 59,554 cr, the shares of Oberoi Realty Ltd are closed at Rs. 1,637.90 per share, from its previous close of Rs. 1,619.45 per share. Oberoi Realty has a target price of ₹1,650, offering a 1% upside with a REDUCE rating.

Written by Manideep Appana

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