After years of slow growth, the Indian real estate market reached an inflection point in 2023. Residential real estate sales in 2023 reached their highest level since 2013, growing year on year by 33%. Throughout the year, supply and demand grew by double digits. Experts believe that stable interest rates, strong macroeconomic conditions, and a positive upswing in consumer sentiment are all contributing to the growth of real estate in India.
Real estate stocks also saw a significant price increase in 2023. As of December 29, 2023, the one-year price return for the Nifty Realty index was 81.35% [Source: NSE]. Let’s check out some of the top real estate stocks in India.
What are Real Estate Stocks?
Real estate stocks are stocks of listed companies involved in the business of construction, development, and management of residential and commercial properties. These stocks help to directly participate in the growth of the real estate market, without having to invest in real estate properties.
List of Top 10 Real Estate Stocks to Invest in India
Here’s the list of 10 top real estate stocks to invest in India.
- DLF Ltd.
- Godrej Properties
- Macrotech Developers Ltd.
- Phoenix Mills Ltd.
- Oberoi Realty Ltd.
- Brigade Enterprise Ltd.
- Prestige Estate Projects Ltd.
- Mahindra Lifespace Developers Ltd.
- Sobha Ltd.
- Swan Energy Ltd.
Overview of the 10 Real Estate Stocks in India
1. DLF Ltd.
Delhi Land & Finance (DLF) is India’s largest real estate company, founded by Chaudhary Raghvendra Singh in 1946. It has a strong presence in India with residential, commercial, and retail properties in 15 states and 24 cities.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE(FY23) |
| ₹ 1,97,097 crore | ₹796 | ₹1225 | 88.2 | 344% | 10.62% |
In FY23, the company reported a y-o-y drop of 2% in revenue to ₹ 6,012 crore, however, profit after tax (PAT) during the period witnessed a y-o-y growth of 36% to ₹2,053 crores from ₹1,513 crores in FY22.
And, in H1FY24, the company reported a total revenue of ₹2,998.13 crores, up by 4.2% from ₹2,876.78 crores reported in H1FY22.
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2. Godrej Properties
Godrej Properties is one of India’s leading and oldest real estate companies, established in 1897 by Ardeshir Godrej. The company is present in 12 cities and majorly focuses in four regions, Mumbai Metropolitan Region, National Capital Region, Pune, and Bengaluru.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 61,525 crore | ₹2211 | ₹2598 | 93.2 | 25% | 7.40% |
In FY23, the company’s revenue was at ₹3,039 crores, up from ₹2,585 crores in FY22. And, profit for the year was ₹621.73 crores, up from ₹349.46 crore.
And, in H1FY24, the company reported 169% y-o-y growth in net profit to ₹1,866 crores from ₹702 crores in H1FY23. The net profit increased to ₹192 crores, from ₹101 crores during the same period last year.
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3. Macrotech Developers Ltd.
Popularly known as Lodha, Macrotech Developers Ltd. is a multinational real estate company offering both residential and commercial properties in Mumbai, Thane, Pune, Hyderabad, Bangalore & London.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 1 yr Return | ROCE (FY23) |
| ₹ 1,09,796 crore | ₹1137 | ₹1199 | 71.8 | 120% | 8% |
In FY23, the group’s consolidated revenue was at ₹9,611 crores, up from ₹9,523 crores reported in FY22. And, profit for the year was ₹489.5 crores, down from ₹1,208.5 crores.
H1FY24 revenue decreased by 22.7% to ₹342.69 crores from ₹443.7 crores in H1FY23. The net profit is ₹38.2 crores, compared to a loss of ₹661.7 crores in H1FY23.
4. Phoenix Mills Ltd.
Phoenix Mills is a mixed-use real-estate development company and currently has 100 operational malls, two hospitality assets, five commercial assets, and two residential assets under its portfolio. The company started operations in 1905 as a textile manufacturing company and entered the growing real estate market in 1987.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 45,955 crore | ₹2572 | ₹2674 | 51.8 | 36% | 0.07% |
In FY23, the company reported revenue at ₹2754.64 crores, up from ₹1,557.9 crores in FY22. Net profit during the period was ₹1,472.50 crores, up from ₹247.98 crores.
The company’s H1FY24 revenue is at ₹1,746.24 crores, up from ₹1,281.34 crores in H1FY23. Net profit during the period is ₹593.53 crores, compared to ₹966.9 crores in H1FY23.
5. Oberoi Realty Ltd.
Oberoi Realty is a four-decade-old company that primarily focuses on Mumbai’s luxury real estate segment.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 55,344 crore | ₹1522 | ₹1556 | 28.2 | 27% | 14.43%[18] |
In FY23, the company witnessed 56% year-on-year growth in total income to ₹4,293.20 crores, up from ₹2,752.42 crores in FY22. Net Profit during the period increased 82% to ₹1,904.54 crores from 1,047.09 crores in FY22.
The revenue for H1FY24 is ₹2177.36 crores as against ₹1,646.6 crores in H1FY23 and profit after tax during the period is ₹777.45 crores, compared to ₹722.01 crores in the same period the previous year.
6. Brigade Enterprise Ltd.
Brigade Enterprise is a leading commercial space developer and has a strong presence across southern states and Gujarat. The company was established in 1987 and are licensed owner of the World Trade Centre across South India.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 21,712 crore | ₹940 | ₹1000 | 91.8 | 48% | 12.65%[21] |
In FY23, the company’s revenue was ₹3,563.21 crores as compared to ₹3,065.51 crores in the previous financial year, an increase of 16.24% on a year-on-year basis. Net profit during the period was reported at ₹222.17 crores as compared to a net loss of ₹64.76 crores in FY22.
The H1FY24 revenue for the company is reported at ₹2093.35 crores, up by 14.7% from ₹1832.47 crores reported in H1FY23. The company’s profit after tax during the period increased by 15.4% to ₹134.9 crores from ₹116.4 crores in H1FY23.
7. Prestige Estate Projects Ltd.
Prestige is a leading real estate company in South India, having pioneered numerous landmark developments. The company was incorporated in 1997 and completed more than 280 projects to date. And currently has over 170 million square feet of project pipeline.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 54,682 crore | ₹1364 | ₹1417 | 32.1 | 44% | 9.74% |
In FY23, the company’s total income was ₹877.20 crores, up by 32.9% from ₹660.02 crores in FY22. And, net profit during the period was ₹106.68 crores, down from ₹121.48 crores in FY22.
The revenue for H1FY24 is ₹522.22 crores, compared to ₹348.65 crores in H1FY23. And, reported a net profit of ₹122.81 crores as against ₹39.97 crores in the same period the year before.
8. Mahindra Lifespace Developers Ltd.
Mahindra Lifespace is a leading residential development company founded in 1994. The company has completed 48 residential projects and is present in 9 cities across India and is pioneering green homes in India.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 8,762 crore | ₹565 | ₹599 | – | 35% | 8.6% |
In FY23, the company’s revenue was ₹659.56 crores, up 62% from ₹408.24 crores in FY22. In FY22, consolidated PAT was ₹161.71 crores, while this year’s was ₹102.83 crores.
The revenue for H1FY24 declined by nearly 29% to ₹135.75 crores from ₹191.16 crores. However, the loss during the period widened to ₹68.62 crores from ₹20.61 crores in H1FY23.
9. Sobha Ltd.
Sobha Ltd. was incorporated in 1995 and is one of the finest real estate development companies in India. It is known for its luxury properties and is majorly involved in residential, commercial, contracting, and manufacturing works.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 12,392 crore | ₹1306 | ₹1343 | 115 | 24% | 7% |
In FY23, Sobha Ltd. reported a total income of ₹3,402.43 crores, up by 28.6% from ₹2.645.2 crores in FY22. And, profit for the year declined to ₹104.2 crores, from ₹173.1 crores in FY22.
The revenue in H1FY24 increased to ₹1712.88 crores from ₹1,264.28 crores in H1FY23. And, net profit during the same period is ₹27 crores as against ₹23.8 crores.
10. Swan Energy Ltd.
Swan Energy founded in 1909 is a premier oil and gas service & petrochemical trading company, which later diversified into the real estate and textile segment.
| Market Cap | CMP (as of 10th Jan 2024) | All-time High Level | PE Ratio | 5 yr CAGR Return | ROCE (FY23) |
| ₹ 14,171 crore | ₹537 | ₹575 | 96.8 | 40% | 1.43% |
In FY23, the company’s total income was ₹1,448.91 crore, compared to ₹494.09 crore in FY22. The revenue contribution from the real estate segment is sizable and is more than other segments of the business. The company significantly reduced its losses in FY23 to ₹61.04 crores from ₹157.89 crores.
For the six months ended on 30th September 2023, the total income of the company is reported at ₹2038.55 crores, up from ₹408.73 crores in the same period the previous year.
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Factors to Consider Before Investing in the Best Real Estate Stocks
Real estate stocks’ performance is influenced by a variety of factors, and it may not be correlated with the performance of the overall market. Let’s look at what factors to consider before investing in the best real estate stocks.
Market Conditions
The performance and outlook of real estate stocks are heavily influenced by the company’s profitability, the type of projects in the pipeline, market supply and demand, the segment in which it operates (residential, commercial, luxury, affordable), the region of operation, pricing trends, the rate of economic growth, and government policies.
Property Valuation
One of the most important factors influencing a real estate company’s stock price is the value and type of its properties. For example, companies operating in the luxurious or commercial segments with higher income generation opportunities will command a higher market value than others.
Time Correction
Real estate companies are prone to the risk of time correction, wherein, the market value of properties stays stagnant for a prolonged period. During this time, the value of properties trades in a narrow range, and the value of assets remains unchanged. This affects the plans and future cash flows of real estate companies.
Financial Performance
Before investing in real estate stocks, undertake a thorough analysis of the companies’ financial performance and strength. Because almost all real estate companies have higher average receivable days due to the nature of their business, you should consider factors such as revenue growth, profitability, debt levels, and cash flows.
Management Quality
Finally, consider the quality and reputation of the management team. Evaluate their experience, expertise, vision, and integrity within the real estate sector. You should not overlook their strategic direction and the company’s corporate governance.
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How to Invest in the Best Real Estate Stocks in India?
Here’s the step-by-step guide to investing in the best real estate stocks in India:
Research the Market: Before investing, analyze the macro trends, latest developments in the sectors, supply and demand dynamics, and regulatory factors.
Choosing the Right Segment: The real estate sector includes residential, commercial, and industrial segments. Identify segments with strong growth potential and companies operating in those segments. Invest in those that align with your investment goals and risk tolerance.
Select Reputable Companies: Focus on established and reputable companies with successful projects, financial stability, and a strong project pipeline.
Stay on Top of Regulatory Changes: Real estate is highly influenced by regulatory changes and also impacts stock prices. For example- the Real Estate Regulatory Act (RERA) has had a significant impact on the Indian real estate market and benefited customers and companies.
Monitor Economic Indicators: Indicators such as interest rate changes, inflation, and GDP growth directly impact the supply and demand dynamics of the real estate market. You should adjust your investing strategy based on changing market conditions.
Conclusion
Robust economic expansion, rising demand for affordable luxury housing, and the diminishing urban-rural divide are playing pivotal roles in the growth of India’s real estate market. Choosing to invest in financially sound, reputable companies, and staying informed of evolving market trends and economic cues will help you to capitalize on the upward trajectory of real estate stock prices.
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*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
FAQs on Solar Energy Stocks
Which real estate company is best for investment?
Real estate companies with a strong focus on the commercial segment are considered to be the best investments because they have a higher income potential from longer leases, rentals, and better price negotiations than other segments.
What is the richest real estate company?
DLF is the richest real estate company in India with the highest market cap of nearly ₹2 lakh crores as of 11th January 2024 and has a strong presence in both commercial and residential segments.
Who is the biggest builder in India?
DLF is India's largest builder, with residential, commercial, and retail properties across 15 states and 24 cities. Macrotech Developers is the second largest real estate company in India, with a market capitalization of nearly ₹1.1 lakh crores as of January 11, 2024.
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I’m Archana R. Chettiar, an experienced content creator with
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