Which phase of the cycle is Indian real estate in right now?
Pankaj Kumar: The real estate cycle between 2011 and 2021 was almost on a stagnant phase. We have not seen any major price movement and the demand was broadly stagnant. But in the last two to three years, we have seen the real estate demand has been on an uptrend and this is largely led by the structural reforms, particularly with respect to RERA and the improving affordability.

Plus, the inventory in the system is on the lower side because of the strong demand and launches were on the lower side. So, this kind of demand trend we are still continuing to see largely because the inventory is around one-and-a-half years or less in most of the micro markets and there is an equally strong demand from the real buyers. So, the demand continues to remain strong and in the latest results also, the volumes were on the upswing. In certain cases, the volumes almost doubled or even the pre-sales value terms have gone up. Prices have moved up, but that has also encouraged the demand.

Which are the stock picks within the space?
Pankaj Kumar: In the last six months, the real estate stocks have moved up very sharply and most of the stocks are trading at their upper end of the valuation band. At these levels, most of the stocks are fully valued, but still we like companies which are looking on a positive side for a long term, like DLF, Macrotech Developers and Prestige Estates that we can look at on declines.

We have also seen a lot of shift happening from affordable to luxury, especially in some project details which have come in like DLF and others. In the NCR region, projects are getting completely sold out. How do you see some of the big players in that region operate? One is Signature Global, second biggest player in Gurgaon, DLF and some others as well.
Pankaj Kumar: In Gurgaon particularly, we have seen a very strong demand for the launches from DLF. They have sold off the entire inventory in a quarter for their latest launch. And even in the recent case, Signature Global has also done well. So, of course, the demand on the luxury and the premium end is quite positive and we see the buyers are preferring towards larger homes and they are preferring for the branded players. That is why most of the sales from the large brands are looking quite strong even if they are quoting at prices that are quoting at around 15-20% higher than the other non-branded players. The demand for this category is quite strong.