The investment argument for the real estate major are plans to launch projects of 35-40 million square feet over the next few years with revenue potential of Rs 36,000 crore to Rs 40,000 crore. An improving market, better affordability and consolidation is expected to help the company double is quarterly pre-sales/bookings to Rs 1,000 crore in FY22, according to the brokerage. The company had posted better than expected bookings and collections in the September quarter while the annuity office portfolio also saw 98 per cent collection.
In addition to the development portfolio, what could act as another trigger for the rental assets are plans to list its real estate investment trust over the next 12-18 months. Analysts also believe that valuations are inexpensive and are at a 45 per cent discount to net asset value. Morgan Stanley has a target of of Rs 264 which offers an upside of 32 per cent from the current levels.
Among other realty players, Godrej Properties is expected to be a major beneficiary of the ongoing consolidation. Its strong brand, financial strength and execution capabilities are expected to help it double its pre-sales/bookings over the next four years from its current levels of 1-2.5 million square feet in key micro markets.
Brokerages are also positive on Phoenix Mills which announced the signing of a non-binding term sheet with GIC to sell a 26 per cent stake for an enterprise value of Rs 5,600-Rs 5,700 crore. Analysts at IIFL say while tenant renegotiations and pick up in consumption could help earnings return to normalcy in FY22, the GIC deal offers comfort on valuations.
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