Realty booming but prefer to play it through building materials & home financiers: Pawan Parakh

economictimes.indiatimes.com:

Pawan Parakh, Fund Manager — Equities, Renaissance Investment, says “that the real estate sector is seeing a very sectoral, big secular tailwind. But we are trying to play this sector more through building materials and home financiers because we are not comfortable with a lot of the names on the real estate space on the developer side. Alsom we do not really understand how to value these companies because the P&L does not reflect the true reality.”What is your view on the real estate pack and which is the top bet?Our channel checks in top 5-10 cities clearly indicate that the demand is back with a bang.

For any good property closer to possession, hardly any inventory is left. So very clearly it is a very sectoral, big secular tailwind that the sector is seeing. But we are trying to play this sector more through building materials because we are not comfortable with a lot of the names on the real estate space on the developer side.

Secondly, we do not really understand how to value these companies because the P&L does not reflect the true reality. So we are actually playing this sector via building materials and through some of the home financiers.What did you make of the ITC demerger news?This was very much on the cards but the actual print has been a bit different from the kind of demerger that the Street was expecting. But very clearly, the management has shown a clear intent that they want to create value for investors.