Real estate stocks seem attractive amid rising consolidation, healthy demand; DLF, Prestige, Brigade top picks: Nuvama

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Also Read: Stocks to buy or sell: Sumeet Bagadia recommends 5 breakout stocks today“Over the medium to long-term, we anticipate the consolidation in favour of organised developers to gather steam. Moreover, rising capital intensity of the realty business, credit crunch and focus on execution are likely to aid developers with strong balance sheets and established brands. With the uptick in the housing space along with the comfort on the debt reduction front, developers have ramped up their business development activity, leading to the strengthening of launch pipelines and spurred pre-sales growth," the brokerage said in a report.

Organised developers are witnessing an improvement in their cash flow generation post-COVID, which shall help them gain market share. Developers with robust balance sheets shall also benefit from attractive business development opportunities. Overall, the brokerage reckons stronger players would gain market share, going ahead.Also Read: Ashok Leyland share price gains as analysts maintain positive view after Q4 results. Should you buy the stock?It expects launches to remain contained due to liquidity constraints.

With valuations remaining comfortable on a relative basis, the brokerage firm argues it is a good opportunity to enter realty stocks. “We believe realty stocks are attractive from a medium-term perspective in light of rising consolidation. With investors increasingly gaining confidence about housing sales trajectory, we believe the odds for the next leg of re-rating are high for developers with sizeable land banks," Nuvama Equities said.Its top picks in the sector include DLF, Prestige Estates Projects and Brigade Enterprises.