Realty Stocks Create Exceptional Wealth For Equity Investors; YTD Returns At 84%
Taking all the challenges in their stride, real estate companies in India have performed exceptionally well during this year. The Realty Index on the National Stock Exchange (NSE) has pumped the returns to the tune of 44 per cent for the period between October 2016 and 2017. The year-to-date (YTD) returns as on October 31 were recorded at staggering 84 per cent, according to the latest release from the NSE.
NSE Realty Index
Returns (in %)
These numbers corroborate that despite having one of the most eventful year, real estate companies in India have demonstrated tremendous resilience and commitment. According to the general notion, it is perceived that real estate stocks do not make for a sound investment channel. However, if we look at the stocks that compose the coveted Realty Index on the NSE, it becomes crystal clear that equity investors should consider making realty companies' stocks a part of their portfolio.
The Realty Index on the NSE comprises the following companies:
The stock value of Indiabulls Real Estate zoomed from Rs 87 to Rs 220 during the April-September 2017 period. That means if you had bought 1,000 shares of this company, investing Rs 87,000 in the beginning of the current fiscal year, you would have secured profits of over Rs 1.30 lakh by the end of September 2017, clocking the return on investment (ROI) at 153 per cent in six months.
Out of the companies contributing to the Realty Index, Godrej Properties is the second-highest wealth creator. The company has generated ROI at 54 per cent during the first-half of the current financial year.
Stock Price in Rs (2017)
Indiabulls Real Estate Ltd.
Prestige Estate Projects
Source: Ace Equity
Meanwhile, the real estate sector in India is fast aligning its operations under the newly implemented regimes of the Real Estate Regulatory Act (RERA) and the Goods & Services Tax (GST). The spate of regulatory reforms implemented by the government is clearly boosting market sentiments and investor outlook towards the sector.