Morgan Stanley Bullish on DLF, Prestige, Sobha SMART INVESTING 8 BROKERAGE FACFESS DEVELTHC R Morgan Stanle Bullish on DLF, Prestige, Sobha Morgan Stanley sees a strong recovery in the offing for residential volumes within the property sector led by pent-up demand, significant improvement in affordability and new launch pipeline. The brokerage said it prefers developers over REITs and is overweight on DLF, Prestige Estate Projects and Sobha. It has an underweight rating on Godrej Properties and equalweight on Oberoi Reaify. The BSE Realty index last year saw an extended period of losses compared to the benchmark and hit its 52-week low in May while Sensex started recovering in March. The BSE Realty index has surged 112% from its 52-Week low of 1259 on May 19, 2020. Sensex has recovered over 90% from its March 2020 Iows. Morgan Stanley has downgraded Embassy REIT and Mindspace REIT to equalweight from overweight and cut target price on Embassy REIT by 12%. "Volumes in the mid-income and affordable segments are tikely to be better than JUxury. We expect volume recovery across metros, inciuding Bengaluru, Greater Mumbai and Gurugram," said Morgan Stanley. Our Bureau AN IR R B T TSRS PRESTIGE ESTATE PROJECTS 4 e k.7 | Raising target price by 9%, Morgan Stanley DLF has laid out plans said Prestige has a batanced portfalio of to faunch 35-40 million residential and commercial assets. Planned square foot of new projnew launches in Bengaluru, Chennai, Noida EE whieh have a revenue = Mumbai, along with ongoing and. 'potential of 36,000 compieted unsold inventory, provide good crore to 40,000 crore monetisation visibility and the company's Over the next few years, valuations appear inexpensive at a 58% sald Morgan Stanley, discount to forward net asset value, it said. raising target price on the stock by 13%. The firm said DLF has altered its strategy to include several middle-income projects d : in the product mix and Morgan Stanley, which has raised target Sales will also begin with | price on Sobha by 33%, said the company is the start of construction. positioning itself to benefit from upcoming Morgan Stanley said an residential demand with its current projimproving physical market | ects and upcoming new launches. Sobha and demand consolidation | continues to diversify geographically to should benefit DLF and non-Bengatury markets and has a strong help double quarterly contractual business to augment cash fIows, pre-sales to 1,000 crore said Morgan Stanley. Valuation is inexpenNn fFY22. sive at 31% discount to NAV, the firm said.