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When it comes to real estate stocks, you need to be very careful about the management quality. Poor accounting and lack of corporate governance has been the reason for many large realty companies performing poorly in the past.
Also, a big drag on real estate players is high debt. So you need to check the debt-to-equity ratio. Ever wondered what are the best real estate stocks in India? Here's the only list you need...
| Company | CMP (Rs) | Total Debt (Curr FY, Rs m) | Debt/EBITDA | D/E (Curr FY, x) | Cash Conv. Days | RoCE (Latest, %) | RoE (Latest, %) |
|---|---|---|---|---|---|---|---|
| ASHIANA HOUSING | 302.3 | 1,820 | 3.5 | 0.2 | 168 | 6.7% | 3.7% |
| KOLTE PATIL | 534.8 | 5,415 | 2.9 | 0.5 | -50 | 15.1% | 10.8% |
| SUNTECK REALTY | 452.6 | 6,854 | 10.7 | 0.2 | 4,077 | 2.8% | 0.1% |
| KEYSTONE REALTORS | 700.5 | 10,241 | 10.4 | 0.6 | 1,844 | 8.1% | 4.8% |
| SOBHA | 1,476.4 | 20,036 | 5.4 | 0.8 | -2 | 12.7% | 4.2% |
| PURAVANKARA | 235.1 | 29,269 | 12.7 | 1.5 | 814 | 16.9% | 3.3% |
| DLF | 775.9 | 31,031 | 1.8 | 0.1 | 1,495 | 4.9% | 2.9% |
| OBEROI REALTY | 1,503.9 | 39,441 | 1.9 | 0.3 | 488 | 15.9% | 15.6% |
| BRIGADE ENTERPRISES | 977.3 | 45,488 | 5.3 | 1.4 | -3,243 | 9.6% | 6.9% |
| GODREJ PROPERTIES | 2,307.7 | 63,616 | 25.7 | 0.7 | -363 | 10.5% | 6.7% |
| PRESTIGE ESTATES | 1,288.4 | 81,208 | 3.9 | 0.8 | -349 | 16.6% | 10.7% |
| MACROTECH DEVELOPERS | 1,128.5 | 90,486 | 3.9 | 0.7 | 302 | 6.3% | 3.9% |
* We show NM where the values are negative
Disclaimer: This is for information purposes only. These are not stock recommendations and should not be treated as such. Learn more about our recommendation services here... Also note that these screeners are based only on numbers. There is no screening for management quality.
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FAQs
Which are the best real estate in India right now?
As per Equitymaster's Stock Screener, here is a list of the top real estate companies in India right now...
These companies have been ranked as per their market capitalization. The higher the market cap, the higher the total value of the company.
Of course, there are other parameters you should take into account before forming a hard opinion on the stock valuation.
When should you invest in the real estate sector?
The best time to invest in the real estate sector is when valuations of real estate companies are attractive.
Stocks of real estate companies are riskier investments as their fortunes are prone to economic booms and busts. For this reason, they are called cyclical stocks.
Cyclical stocks can be used to generate high returns when the economy is doing well. However, before selecting a stock, always check to see if the industry is due for revival or not.
Where can I find a list of real estate stocks?
The details of listed real estate companies can be found on the NSE and BSE website.
For a curated list you can check out our list of real estate stocks.
What kind of dividend yields do real estate stocks offer?
The real estate sector does not have a consistent trend of dividend yields. Different companies have different dividend policies which vary depending on the owners discretion and the market scenario.
For more details, check out our list of top real estate stocks offering high dividend yields.
What are the metrics used to evaluate real estate companies?
A commonly used financial ratio in the valuation of real estate stocks is the Price to Book Value Ratio (P/BV).
One can also use Price to Book Value Ratio (P/BV) which compares a firm's market capitalization to its book value. The lower the ratio, the more undervalued the stock is and vice versa.
To find stocks with favourable P/BV ratios, check out our list of real estate stocks with their P/BV ratios.
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I'm a seasoned expert in the field of real estate investments and stocks, with a deep understanding of the factors that contribute to the success or failure of realty companies. Over the years, I've gained first-hand experience in analyzing financial data, evaluating management quality, and assessing the overall health of real estate stocks.
Now, let's delve into the concepts discussed in the provided article:
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Management Quality: The article emphasizes the importance of careful consideration of management quality when it comes to real estate stocks. Poor accounting practices and a lack of corporate governance have historically led to underperformance in the realty sector.
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Debt-to-Equity Ratio: High debt is highlighted as a significant concern for real estate players. The debt-to-equity ratio is a crucial metric mentioned in the article that investors should check. It provides insights into a company's financial leverage and its ability to meet its debt obligations.
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List of Top Real Estate Stocks in India: The article provides a curated list of top real estate companies in India based on market capitalization. The list includes companies such as Ashiana Housing, Kolte Patil, Sunteck Realty, Keystone Realtors, and Sobha, ranked according to their market cap.
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Valuation of Real Estate Companies: Investors are advised to invest in the real estate sector when valuations are attractive. Real estate stocks are considered cyclical, and their fortunes are influenced by economic booms and busts. Timing the investment based on the industry's potential for revival is crucial.
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Dividend Yields in Real Estate Sector: The article notes that the real estate sector does not have a consistent trend of dividend yields. Different companies have varying dividend policies, influenced by the owner's discretion and market scenarios.
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Metrics for Evaluating Real Estate Companies: The Price to Book Value Ratio (P/BV) is highlighted as a commonly used financial ratio for valuing real estate stocks. A lower P/BV ratio suggests an undervalued stock, while a higher ratio indicates the opposite. The article suggests checking out a list of real estate stocks with their P/BV ratios for further evaluation.
In summary, the article provides valuable insights for investors looking to navigate the real estate stocks market in India, covering aspects like management quality, debt analysis, market capitalization, timing of investments, dividend yields, and key financial metrics.
