Real Estate To Be Investors’ Favourite In '21

Outlook Money brings you expert opinions on how markets are predicted to behave over the next year. This is the second, in a series.

In this part, we present views of Nirali Shah, Senior Research Analyst, Samco Securities.

How do you see the year 2021 performing for markets?

The year 2021 is likely to witness a mix of corrections and bullish price trend. Nifty could trade in the broader range of 12,500 and 14,000. Inflation is expected to inch up in the new year due to excess liquidity and low interest rates. News based triggers could lead to short corrections. Investors should use this opportunity to buy on dips in quality bets. Another wave of restrictions and lockdowns or lack of efficacy of vaccines could pose a threat to the bull rally.

Stocks from which sector are likely to be in demand and why?

Real Estate is likely to outperform in 2021. With a reduction in stamp duty in Maharashtra, Real Estate Regulatory Authorities (RERA) in place, and inflation on the rise, real estate stocks could witness good gains. Stamp duty cuts announced in Maharashtra have boosted registration activity with volumes growing 48 per cent, year-on-year, between September and November. Sales growth has continued even after the end of the festive season, which is a positive sign. While new launches had been low this far in 2020-21, real estate companies are expecting healthy sales over the next few months.

Which two stocks will benefit from this sector and why?

Godrej Properties and Brigade Enterprises are two stocks that could benefit from a sectoral rise. Godrej Properties has benefitted from the rebound in residential demand over the past few months. Its strong brand name and past performance have helped it rapidly scale up presence in four key market areas —Mumbai, Pune, National Capital Region (NCR) and Bengaluru.

Brigade Enterprises is likely to witness momentum in the stock market over the next year. It is expected to be driven by a robust order pipeline, consolidation opportunities in the residential space and strong execution capabilities.

However, both these companies have a considerable amount of debt and are high-risk, high reward bets. Investors must carry-out due diligence according to their risk appetite before investing in these stocks.

Click here to read the first part.