HDFC Securities Slashes Realty Targets, Names 10 Top Picks

REAL-ESTATE
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AuthorAarav Shah|Published at:
HDFC Securities Slashes Realty Targets, Names 10 Top Picks
Overview

HDFC Securities lowered target prices for real estate firms by up to 20%, pointing to slower sales and longer deal times. They now value companies at Net Asset Value (NAV) without any premium. While the market is currently slow due to sentiment, new sales should rise from early Q3 FY27. HDFC Securities prefers mixed-use developers and has selected top stock picks.

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Realty Sector Faces Lowered Targets

HDFC Securities has significantly lowered its target prices for real estate developers. The firm cited slowing sales and longer times to close deals as reasons for reducing valuations by 15-20%. As a result, HDFC Securities will now value these companies based only on their Net Asset Value (NAV), dropping previous premium expectations.

Market Slowdown Seen as Sentiment-Driven

The brokerage believes current stock price drops largely reflect investor sentiment rather than a collapse in demand. HDFC Securities expects a quiet market for the next three to six months, with new sales picking up around the festive season in early Q3 of fiscal year 2027. This forecast aligns with historically slower sales in the first half of the fiscal year.

Mixed-Use Developers Favored for Stability

HDFC Securities favors developers focused on mixed-use properties, particularly those with significant rental income streams and steady pre-sales. This strategy helps reduce the risk tied to residential sales alone. The firm has named Prestige Estates Projects Ltd, Godrej Properties Ltd, Oberoi Realty Ltd, and Sobha Ltd as key investment ideas. In a separate note, Nirmal Bang upgraded Godrej Properties to a 'Buy', acknowledging the impact of recent price drops.

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