Real estate is considered one of the best long-term investments in India since the rates of real estate stocks have only been increasing over the years.
The sentiment attached to owning personal property in India is quite high, increasing the greater sale of housing every year, which eventually drives up the prices of real estate stocks in the long term.
This accounts for a substantial profit, and many investors can easily earn $70,000 to $124,000 every year by holding long-term real estate stocks. It is considered as one of the safest sectors not just in India but worldwide with respect to investment.
If you’re a beginner in stock market investing, we recommend reading our guide on things you should do before buying your first stock.
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Here’s the list of top real estate stocks in India to hold for the long term.
1. Godrej Properties Ltd.
India’s multinational conglomerate, Godrej, is one of the oldest existing companies in the country. With a turnover of 54.74 billion Indian rupees as of 2020, it is definitely one of the most reputed companies in India.
The stock prices of Godrej Properties Ltd. Have increased by 11.5% every year over the last decade. The company’s net debt currently stands at Rs. 3080 crore, which even though is higher than the previous quarter but has quite the possibility to come down quickly with the constant company efforts. Its five-year chart shows almost a ten times jump in its price from about Rs. 323.85 to a whopping Rs. 2297 (as of 2nd November), promising significant t long-term returns.
2. Sobha Ltd.
The Indian multinational real estate developer is headquartered in Bangalore and has been in the business for over two decades now. The Sobha real estate stock has very strong pipelines in the coming years and is well placed in the long run, to be held for at least 2 to 3 years.
With a market capitalization of Rs. 7866 crores, the company’s net debt has not increased much in the year 2021 compared to the previous year, standing at about Rs. 3000 cores. It is considered as one of the best long-term investments in real estate, considering the prices shooting up 4 times in the last 5 years from Rs. 261 to 847 (as of 2nd November).
3. Prestige Estates Projects Limited
Prestige is also one of India’s oldest standing companies, founded in 1986, with a revenue of over Rs. 120 crores USD. The property developers are a mid-cap company with a market cap of about Rs. 17,000 crores. The company cut its net debt by About Rs. 7,000 crores in the fourth quarter of 2021, reinstalling hopes of long-term investors in the company.
The price of the Prestige estate stock has increased from Rs. 181 to Rs. 461 (as of 2nd November) in the last 5 years, signifying more than almost a 100% jump. The future withstanding of the company is pretty strong, with several grants and upcoming projects that are going to make the stock a strong one to hold onto for the next 5 years.
4. Kolte-Patil Developers Ltd
Founded about 3 decades ago, the Kolte-Patil Developers is one of the leading real estate companies with dominance in the Pune residential market. It is a small-cap company with a market capitalization of about Rs. 2,000 crores and net profit after tax of Rs. 20 crore in the second quarter of 2021.
The stock of Kolte-Patil has seen substantial growth over the last decade, from increasing to Rs. 339 (as of 2nd November) from just Rs. 33 (as of 2010). The 10 times jump portrays the company to be a decent fit in order to hold the real estate stock in the long term. With strong quarterly growth results, it has a positive debt to equity ratio that one can count on.
5. Oberoi Realty Limited.
The publicly listed Indian multinational real estate development company Oberoi Realty was founded in the 1980s. The group is known to create high-end luxury apartments starting from 3 crores in cities like Mumbai. The company has a market cap of approximately Rs. 33,000 cores and comes under a large-cap company.
The big brand name and competitive advantage in the market, along with positive return on capital employed and return on asset percentage, makes Oberoi Realty a strong long-term investment. The price of the stock has increased from Rs. 343 in 2017 to Rs. 991 in 2021, signaling more than 100% returns on the capital invested.
6. Indiabulls Real Estate Ltd
The Indian conglomerate operates mainly in the housing finance, consumer finance, and wealth management sector. However, the company entered into the real estate business in 2006 and has been operating as one of the largest real estate companies in the country. They have their presence in both commercial and residential real estate with net revenue of approximately Rs. 150 crores as of 2020.
The Indiabulls real estate price traded at Rs. 66 in 2015 and has increased to Rs. 174 as of 2nd November, signifying almost a three times increase. The stock is considered to be a decent long-term investment, especially if you want to invest in a not so expensive stock to earn significant returns.
7. Mahindra Lifespace Developers Ltd
The real estate and infrastructure developer Mahindra Lifespace Developers Ltd was founded in 1994, headquartered in Mumbai, India. They have a market capitalization of about Rs. 4300 crores, with a revenue of Rs. 66 crores, and 2021 Q2 profit Rs. 13 crores.
The stock is definitely a strong buy as of now in order to be held as a long-term investment. Mahindra Lifespace’s stock has given significant results over the years, with a 100% increase in price since 2017 and a 1000% increase in price since 2010. The stock was priced at Rs. 28 in 2010 and is currently up by a massive margin, Rs. 283.
8. Ashiana Housing Ltd
Ashiana Housing Ltd was founded in 1979 and is an Indian real estate development company with its headquarters in the capital, New Delhi. It has been recognized by Forbes and awarded Asia’s 200 best under a billion. It is a small-cap company with a market cap of only Rs. 2,000 crores but has done significantly well over the years. Its current net turnover is over Rs. 355 crores. Along with an income exceeding Rs. 370 crores.
The price of the stock has increased from Rs. 29 to Rs. 200 (approx.) over the last decade. The forecast for Ashiana Housing Ltd’s pricing is a positive outlook for the next 5 years, and the stock can definitely be considered for your next long-term investment.
9. Ajmera Realty & Infra India Ltd
One of India; s leading real estate companies, Ajmera Realty, was founded in 1985 and is worth $450 million. They have a market capitalization of about Rs. 2,000 crores but has been soaring high with respect to its prices in the Bombay Stock Exchange. The stock witnessed a 52 week high in June 2021, with the stock price rising to Rs. 268.45 per share. Since then, the prices have continued to increase.
As of 2017, the price of the stock was Rs. 144 and has seen a 100% jump by trading at Rs. 335 as of 2nd November. Investing in the company for the long run is predicted to provide decent profits.
Upsides of Holding Realty Stocks
- It protects you against inflation
- The competitive risk-adjusted returns from realty stocks is about 11% every year over the last 5 decades
- Helps in building equity and wealth in the long term
- Provides you with tax-free long term capital gains
- Introduces you to real estate investment trust that is a high dividend total return investment
Risks of Holding Realty Stocks
- During a slow economic growth, realty stocks are one of the first securities that get negatively impacted
- There is nothing you can really do to control the performance if a particular real estate stock is not performing well
- Some realty brokers charge high transaction costs and fees to execute the trade
Being a widely traded type of security, real estate is surely one of the safest and most profitable bets in the long term.
If you lock in your investments for 5 years, you can easily expect a 100% increase in the prices, which means getting double what you invest. It is considered as safe security because real estate around the world is one of those things that is stable enough to ensure that you earn significantly well.
Hence, choose your portfolio and invest in a variety of stocks without further due!