Macrotech Developers surges 40% from 52-week low in 4 sessions; should you buy?
2 min read . Updated: 02 Mar 2023, 04:09 PM IST
PremiumReal estate firm share prices rose 18% on Thursday. The company stock has been recommended by two brokerage firms
After hitting its 52-week low of ₹711 on February 24, Macrotech Developers shares have jumped more than 40 percent. On Thursday, the company shares closed 18 percent higher at ₹1,014.35 on BSE. In last one week, the stock price has surged about 24 percent. The real estate firm has received a ‘buy’ rating from two brokerage firms, ie Sharekhan by BNP Paribas and Motilal Oswal. The bullish stance on Macrotech Developers has come in the wake of strong growth prospects of the real estate sector.
Macrotech developers was the leading performer in the Nifty realty index during Thursday's intra-day trade. Nifty realty index was trading up by 1.3% at 403 points. In the past four trading days, the Macrotech developers shares have rallied by 26 percent. The company's stock hit a 52-week low of ₹711 on February 24. The company stock declined between February 13 and February 24 and recovered after that.
In past 1 month, Macrotech developers stock has fallen 7.33%. The company stock follow the trend similar to that of Nifty Realty which has underperformed the benchmark index in past one month.
The housing segment is expected to see a boost in the coming time due to the rise in the country's per capita income from $2,000 to $5,000 over the next decade.
Brokerage: Motilal Oswal
Recommendation: We maintain BUY with a SOTP based TP of ₹1,250
The stock brokerage firm said that the company has laid out a clear growth strategy with an aim to capture market share in micro-markets with a niche presence. In line with its growth strategy, the company has already exceeded its full-year BD guidance by adding 11 new JDA projects with a GDV of INR178b.
“At the CMP, the stock trades at a 15% discount to its existing project NAV, which indicates that the market is not offering any value to its ability to successfully monetize existing projects, let alone funding for growth. We believe this is unwarranted given the company’s execution track record and market leadership position.We maintain BUY with a SOTP based TP of 1,250 (SOTP details in Exhibit 14)," said the stock brokerage firm.
Brokerage: Sharekhan by BNP Paribas
Recommendation: Maintained a potential upside of 40%
“Its balance sheet is improving with a net debt reduction to Rs8000 crore in Q3FY23 and expected to reduce further over next two years. At CMP, the stock is attractively valued at 2.1x P/B on FY2025E earnings as against an average 3.5x 1 year forward P/B multiple since listing. We believe that the current valuation adequately factors in headwinds and a significant stock correction has turned risk reward favorable for the investment for the next 12-15 months. Hence, we retain our positive view on the stock and expect a potential upside of 40%," said the brokerage firm.
It is also hopeful of a resilient housing demand in the economy. That's why the brokerage firm expects Macrotech to remain on track and exceed its pre-sales guidance for FY2023 while already surpassing new project addition targets. The company has also some strong project yet to be launched in the current financial year.