How should you play the real estate theme? Varun Goel answers

economictimes.indiatimes.com:

Varun Goel, Head- Equity AIF, Nippon India MF, says “that the wires and cables and the building material companies are riding the real estate growth spurt which may continue for the next few years. As such, the growth will definitely be strong though the valuations in some of these names have run up, especially on the wires and cables and some of the ancillary space. One needs to be a little careful in terms of incremental buying from this point onwards.”
What is your take on the home improvement theme? A lot of those stocks are doing well, whether it is consumer durables or whether it is the specialized names or the cable companies. How do you justify the valuations?
Our sense is that we are looking at a revival in the residential real estate cycle.

For the first time after 2013, we are beginning to see not only good volume of tech but also price hikes across the country. Particularly in the NCR area, the price hikes have been very, very strong. So our view is this is the beginning of a new residential real estate cycle.

As such, we would prefer to play it through the residential real estate players with good clean balance sheets and good corporate governance.
Incrementally, I would believe that the wires and cables companies and the building material companies are also riding the growth spurt which may continue for the next few years. As such, the growth will definitely be strong.

Yes, I agree that the valuations in some of these names have run up, especially on the wires and cables and some of the ancillary space. One needs to be a little careful in terms of incremental buying from this point onwards.

Unlock Leadership Excellence with a Range of CXO Courses