Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Equity Bottom-Up

Kolte Patil Developers / Equity Bottom-Up

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Residential real estate sector in India presents a decadal opportunity led by the shift to Organized from Unorganized. Our top pick in the space is <a href="https://www.smartkarma.com/entities/kolte-patil-developers-ltd" target="_blank" data-smartkarma-citation="entities:6819:1" rel="noopener">Kolte Patil Developers (KPDL IN)</a>, a branded developer based out of Pune.
<div id="annotable-executive_summary-1">For detailed thematic insights into the changing landscape of residential real estate development in India, please refer to our insight: <a href="https://www.smartkarma.com/insights/a-fat-theme-organized-real-estate-developers-in-india-a-decadal-opportunity" target="_blank" data-smartkarma-citation="insights:56658" rel="noopener">A Fat Theme | Organized Real Estate Developers in India - A Decadal Opportunity</a>.</div>
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Residential real estate sector in India presents a decadal opportunity led by the shift to Organized from Unorganized. Our top pick in the space is Kolte Patil Developers (KPDL IN), a branded developer based out of Pune.
For detailed thematic insights into the changing landscape of residential real estate development in India, please refer to our insight: A Fat Theme | Organized Real Estate Developers in India - A Decadal Opportunity.


Kolte Patil: A Fat Bet on Booming Residential Real Estate in India

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

External broker reports(aggregated public sources)

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Thematic (Sector/Industry)

<ul><li>Housing demand continues to surprise positively: After a strong Q4FY24, we expect a sequentially flattish presale growth in Q1FY24 (on a high Q4FY23 base, driven by sustenance sales)</li><li>In the absence of major new launches, sustenance sales are likely to remain robust</li><li>We expect new project launches to come to market in H2FY24</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Housing demand continues to surprise positively: After a strong Q4FY24, we expect a sequentially flattish presale growth in Q1FY24 (on a high Q4FY23 base, driven by sustenance sales)In the absence of major new launches, sustenance sales are likely to remain robustWe expect new project launches to come to market in H2FY24Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>Q4FY23 earnings season saw an overall in-line performance, with wide divergences across sectors and companies</li><li>Aggregate revenue/PAT grew by 13%/9% YoY across the HSIE coverage (~215 stocks), their two-year CAGR being 19%/15%</li><li>Our coverage universe saw strong YoY revenue growth in auto, lending financials, industrials, IT, cement and power sectors</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q4FY23 earnings season saw an overall in-line performance, with wide divergences across sectors and companiesAggregate revenue/PAT grew by 13%/9% YoY across the HSIE coverage (~215 stocks), their two-year CAGR being 19%/15%Our coverage universe saw strong YoY revenue growth in auto, lending financials, industrials, IT, cement and power sectorsContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

India Equity Strategy - Banks Continue to Lead the Pack; Profitability Improves for Most Sectors

<ul><li>Record FY23 presales expected for most of the players: Going by the numbers for FY23 reported to date by top developers, we expect annual presales for most of them to surpass their previous highs</li><li>Godrej, Macrotech and Sobha, all reported their lifetime high in residential sales with INR 122/120/52bn respectively</li><li>The annual growth also has been substantial with Godrej growing by 55%, Macrotech by 34% and Sobha by 34%</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Record FY23 presales expected for most of the players: Going by the numbers for FY23 reported to date by top developers, we expect annual presales for most of them to surpass their previous highsGodrej, Macrotech and Sobha, all reported their lifetime high in residential sales with INR 122/120/52bn respectivelyThe annual growth also has been substantial with Godrej growing by 55%, Macrotech by 34% and Sobha by 34%Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>Demand momentum may continue to reflect in presales: We expect presales momentum to continue, driven by high affordability, stable prices, and overall positive sentiment for real estate</li><li>Mortgage rate increase is yet to meaningfully reflect in demand destruction as we may be closer to peak of interest rate tightening</li><li>Affordability still has an upper hand in decision-making</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Demand momentum may continue to reflect in presales: We expect presales momentum to continue, driven by high affordability, stable prices, and overall positive sentiment for real estateMortgage rate increase is yet to meaningfully reflect in demand destruction as we may be closer to peak of interest rate tighteningAffordability still has an upper hand in decision-makingContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Real Estate (Q2FY23 Results Preview): Resilient demand

India

Sobha Limited provides construction services. The Company offers design and architecture, mechanical, plumbing, interiors, landscape, residential, commercial, and civil construction services. Sobha serves customers in India, Singapore, and United Arab Emirates.

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Sobha Ltd (SOBHA IN)

Kolte Patil: A Fat Bet on Booming Residential Real Estate in India

Business development activity, pace of execution and new launches are at all time high, leading to all-time high sales velocity. The stock has...

Ankit Agrawal, CFA

Real Estate: Presale momentum continues

After a strong Q4FY24, we expect a sequentially flattish presale growth in Q1FY24 (on a high Q4FY23 base, driven by sustenance sales)

HDFC Securities

India Equity Strategy - Banks Continue to Lead the Pack; Profitability Improves for Most Sectors

Q4FY23 earnings season saw an overall in-line performance, with wide divergences across sectors and companies. Aggregate revenue/PAT grew by 13%/9%...

HDFC Securities

Real Estate - Stable Performance

Going by the numbers for FY23 reported to date by top developers, we expect annual presales for most of them to surpass their previous highs

HDFC Securities

Real Estate (Q2FY23 Results Preview): Resilient demand

We expect presales momentum to continue, driven by high affordability, stable prices, and overall positive sentiment for real estate

HDFC Securities

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