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BSE Realty Index Hits 10-yr High; Omaxe Zooms 34% in One-Year

The BSE realty index hit a 10-year high on expectations of a strong revival in the housing segment even as sales dropped in April-June 2021.

The realty index hit an intra-day high of 3040.82 points on Monday (July 12) – its highest since February 2010, reported newspapers across India. In the last two months, the realty index has risen 27% compared to an 8% gain in the benchmark Sensex. Stocks of real estate companies zoomed on the back of strong revival exhibited by listed real estate companies in H2 of 2020-21. The stock price of Omaxe also rose 34% in the last one year and 24% in the last two months. It is currently trading in the range of Rs 90-95 apiece.

Experts say this may be a start of a new upcycle in the real-estate sector after consolidation in the last 10 years.

Record low-interest rates, bottomed out real estate prices, and desire to own a home have sparked interest amongst homebuyers. The outlook for the sector remains positive.

Mr. Rajan Gupta, VP (Business Development & Corporate Strategy), Omaxe Ltd., during the announcement of FY 2020-21 results said, “The first quarter of FY 2021-22 is expected to be severely impacted due to the restricted lockdowns imposed by various state governments as a result of the second wave of COVID-19 pandemic.”

Housing sales across the top eight cities declined by 16% to 15,968 units in the April-June quarter. On a sequential basis, sales declined by 76%, reported The Mint newspaper quoting a report by Proptiger. However, Delhi-NCR witnessed 50% surge in housing sales in the April-June quarter. Sales were 54% lower as compared to January-March.

Going forward, Mr. Gupta adds, “An immediate revival of demand like last year looks unlikely since consumers are cautious in their purchases due to emotional and financial disruption. However, the government’s preparations for a possible third wave and the vaccination roll-out will determine customer sentiments.”

On the back of a strong sales number of Rs 2051 cr in 2020-21, Omaxe writes on its Facebook page, “The popularity of Brand Omaxe and its leadership position in State Capitals and tier 2/3 cities are reflected in the sales booking number for 2020-21 and stock prices.”

A healthy mix of our residential and commercial projects, which performed well last year, will continue to remain a priority with construction and possession being on top of the company’s endeavour in this financial year, Mr. Gupta added.

Omaxe is currently executing 23 real estate projects across cities like Delhi, New Chandigarh, Lucknow, Allahabad, Ludhiana, Faridabad, Indore to name a few. The company has offered for possession 126.15 million sq. ft. till date in real estate and construction contracting.