Tale of the Tape 

Hiya everyone. Happy Friday!

$NIFTY50.NSE ( ▼ 0.68% ) and Sensex ended flat, wrapping up an intense week with a boring end. PS - the Nifty did snap a 3-week-losing streak though!  Midcaps (-0.3%) and Smallcaps (+0.7%) traded mixed. The advance-decline ratio was split evenly.

Most sectors ended in the red. Real Estate (-1.2%) and IT (-0.9%) saw the deepest cuts. Oil & Gas (+0.6%) and Metals (+0.4%) saw some buying.

Nifty Realty Index is down -22% YTD. Read our top story for why investors are panicking and how best to play this sector in 2025.

Blume Ventures says 1 billion Indians don’t have any purchasing power. Check out our analysis below for why the headlines miss some nuance.

$RELIANCE.NSE ( ▼ 0.83% ) was the top Nifty gainer. PS - the stock got its second major upgrade this week, with Macquarie turning bullish.

Defence stocks were on a roll today. $GRSE.NSE ( ▲ 3.3% ) , $BDL.NSE ( ▲ 1.66% ) and $DATAPATTNS.NSE ( ▲ 3.37% ) were up +6% to +16%.

$ZEEL.NSE ( ▲ 2.09% ) gained after promoters increased their stake to 4.28% vs 3.99% earlier.

$GENSOL.NSE ( ▼ 2.0% ) was in focus after its CFO resigned amidst its liquidity crisis.

63 Moons Technologies gained after announcing it would settle the NSEL payments episode with a one-time payment of Rs 1,950 cr.

$JSFB.NSE ( ▼ 2.19% ) soared after the RBI granted it a AD-1 licence for forex operations.

Here are the closing prints:

Stock
Real Estate - Signs of Peaking Out?

The market correction is hurting all, but some have bled more than others. The Nifty Realty Index is down a whopping -22% YTD. Some experts worry that the golden goose of 2023 and 2024 may finally be cooked. Here’s what you need to know.

1) What’s got people concerned: Weak GDP growth + stagnant urban incomes are hurting residential sales. FYI - Q3 housing sales fell -21% YoY for the top 9 cities. Granted, this is partly due to a high base effect, but it could be signalling we hit peak sales in 2024. The Q3 results of some developers (Prestige, Keystone etc) weren’t encouraging either. Finally, delayed launches are also a key concern.

2) What remains a bright spot: HSBC estimates that most developers have hit 70% of their pre-sales guidance in 9MFY25. Q4 is also typically strong and should carry many through for the year. Also, even if a slowdown is around the corner, balance sheets are very strong right now and can withstand shocks!

3) What should you do as an investor:  During a downturn, its fundamentals + execution that matters above all else. Find the strong in a pack and cut off the weak. For example: $DLF.NSE ( ▲ 1.03% ) has already hit its FY25 annual guidance, while $LODHA.NSE ( ▲ 0.55% ) & $BRIGADE.NSE ( ▼ 2.06% ) are in comfortable positions to hit their targets. $GODREJPROP.NSE ( ▲ 1.23% ) has a tough task ahead of it, while $SOBHA.NSE ( ▼ 0.83% ) & $SHRIRAMPPS.NSE ( ▲ 1.03% ) have lowered their guidance. Finally, $PRESTIGE.NSE ( ▲ 1.63% ) has lagged and may fail to meet its own projection!

Big Picture: As India’s macro + markets stumble, temper your expectations. FYI - HSBC is still bullish on real estate and sees a rally, but has cut target prices across the board including DLF (Rs 920 p/sh vs Rs 1,050 p/sh earlier) and Sobha (Rs 1,650 p/sh vs Rs 1,900 earlier).

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