Top 10 Real Estate Stocks in India: Features, Taxation & Benefits of Real Estate Shares

Urbanisation and increasing disposable income have driven India’s real estate sector. As a result, this sector has rapidly evolved. This industry includes commercial, residential, and industrial segments. Real estate stocks, including real estate investment trusts (REITs), are well-positioned to benefit from the rising demand for properties. Investing in real estate stocks can add stable income and tax advantages to your portfolio, depending on the investment type. However, investors must conduct thorough research and analysis when selecting promising real estate stocks. This article will delve into the top real estate stocks, key forces, features, taxation, benefits, challenges, and how to invest in them.

Top Real Estate Stocks in India for 2024

Here is a list of the top real-estate stocks based on their fundamental score and including their real estate stock prices and market capitalisations:

Real Estate Stock Name	Market Cap (in Cr)	Share Price	Net Income	Net Profit Margin	Fundamental Score	1Y Return
Nesco Ltd	₹6,585.89	₹934.70	362.79	46.33	9.43	50.47
DLF Ltd	₹2,07,579.64	₹838.60	2,727.09	39.19	8.50	71.05
Anant Raj Ltd	₹16,773.16	₹490.60	260.90	17.16	7.84	175.55
Phoenix Mills Ltd	₹66,679.63	₹3,730.85	1,099.22	26.75	7.78	134.66
Coral India Finance and Housing Ltd	₹212.80	₹52.80	20.77	67.94	7.55	44.66
GeeCee Ventures Ltd	₹812.84	₹388.70	38.37	38.37	7.54	113.87
Oberoi Realty Ltd	₹65,317.51	₹1,796.40	1,926.60	39.91	7.31	81.04
Marathon Nextgen Realty Ltd	₹3,075.30	₹600.55	166.47	22.32	6.18	89.98
Eldeco Housing and Industries Ltd	₹1,001.00	₹1,018.00	33.86	27.70	6.09	29.57
Ganesh Housing Corp Ltd	₹8,267.83	₹991.50	140.57	51.25	5.23	140.57

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data in the real estate share list is from 5th July 2024. This data is derived from Tickertape Stock Screener.

• Sector > Real Estate
• Fundamental Score: Sort from highest to lowest
• 1Y Return: Positive (Set the lower limit to zero)
• Net Profit Margin: Set to High
• Net Income: Positive (Set the lower limit to zero)

Note: The fundamental score is a Tickertape proprietary metric for NSE-listed stocks, ranging from 1 to 10. This score ranks stocks within their sector, with a higher score indicating a stronger company. It considers factors such as valuation, profitability, market share growth, financial health, and earnings growth.

🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.

Overview of the Top Real Estate Stocks in India (2024)

Here is a brief overview of the top realty stocks in India on our real estate stocks list.

Nesco Ltd

Nesco Limited operates in several sectors: licensing premises in IT park buildings and offering related services, providing exhibition spaces and services to organisers, manufacturing machines and capital equipment, and offering hospitality and catering services. Over the last five years, the company’s revenue has grown at a yearly rate of 14.81%, higher than the industry average of 4.1%. In the same period, the company’s market share increased from 0.57% to 0.88%. 

DLF Ltd

DLF Limited and its subsidiaries operate in real estate development in India. They identify and acquire land and handle their projects’ planning, construction, and marketing. Over the last 5 years, the company’s net income has grown at a yearly rate of 15.63%, higher than the industry average of 15.52%. The company’s cash flow margin is 39.51%, and its net profit margin is 39.19%. 

Anant Raj Ltd

Anant Raj Limited operates in India’s real estate and infrastructure sector. The company develops residential townships, group housing, commercial properties, IT parks, malls, office complexes, affordable housing, data centres, hotels, and serviced apartments. Over the last five years, the company’s revenue has grown at a yearly rate of 33.09%, higher than the industry average of 4.1%. In the same period, the company’s market share increased from 0.53% to 1.71%. 

Phoenix Mills Ltd

Phoenix Mills Limited operates and manages malls, constructs commercial and residential properties, and runs hotels in India. The company has two main segments: Property and Related Services and Hospitality. Over the last 5 years, the company’s revenue has grown at a yearly rate of 14.21%, higher than the industry average of 4.1%. The company’s market share increased from 3.08% to 4.61% in the same period. 

Coral India Finance and Housing Ltd

Coral India Finance and Housing Limited operates in India’s property construction, development, and maintenance. The company has two segments: Construction and Investments. It develops commercial and residential projects and offers financial services. Over the last 5 years, the company’s revenue has grown at a yearly rate of 16.01%, higher than the industry average of 4.1%. The company’s market share increased from 0.02% to 0.03% in the same period. 

GeeCee Ventures Ltd

Geecee Ventures Limited operates in real estate development, power generation, and financing and investing in India. It has three main segments: Real Estate, Investments/Financing, and Wind Power Generation. The company develops residential, commercial, and affordable housing projects. The company’s net profit margin is 38.37%, and its cash flow margin is 165.28%. 

Oberoi Realty Ltd

Oberoi Realty Limited and its subsidiaries focus on real estate development and hospitality in India. The company operates in two segments: Real Estate and Hospitality. It develops and sells residential, commercial, hospitality, retail, and social infrastructure projects. Additionally, Oberoi Realty leases office and retail spaces. Over the last 5 years, the company’s revenue has grown at a yearly rate of 12.59%, higher than the industry average of 4.1%. The company’s market share increased from 3.89% to 5.42% in the same period. 

Marathon Nextgen Realty Ltd

Marathon Nextgen Realty Limited is a subsidiary of Marathon Realty Private Limited. The company builds and sells commercial and residential real estate projects in India. Over the last 5 years, the company’s revenue has grown at a yearly rate of 55.17%, higher than the industry average of 4.1%, and its market share increased from 0.12% to 0.84%. In the same period, the company’s net income has grown at a yearly rate of 39.52%, which is also higher than the industry average of 15.52%. 

Eldeco Housing and Industries Ltd

Eldeco Housing and Industries Limited was founded in 1985 and is based in Lucknow, India. The company develops real estate properties. It promotes, constructs, develops, and sells townships, condominiums, industrial estates, malls, office buildings, and plots. The company’s net profit margin is 27.7%, and its cash flow margin is 10.6%. 

Ganesh Housing Corp Ltd

Ganesh Housing Corporation Limited operates in India’s real estate and construction sectors, focusing on residential, commercial, and infrastructure projects. It was established in 1965 and is headquartered in Ahmedabad. The company holds around 500 acres of land for future development. Over the last 5 years, the company’s revenue has grown at a yearly rate of 27.72%, higher than the industry average of 4.1%, and its market share increased from 0.39% to 1.01%.

What are Real Estate Stocks?

Real estate stocks are equity investments in companies that own, develop, manage, or lease real estate properties such as commercial buildings, residential complexes, or land. These stocks enable investors to participate in the real estate market’s potential gains by owning business shares within the industry. Ideal for diversifying portfolios or capitalising on long-term growth and reliable dividends, real estate stocks are favoured by investors seeking exposure to property market dynamics and potential capital appreciation.

These companies include developers, property managers, Real Estate Investment Trusts (REITs), and building contractors. They generate income through property rentals, sales, or property management services. Investing in real estate stocks may allow investors to benefit from the sector’s growth and performance without directly owning properties.

How to Invest in Real Estate Stocks in India?

1. Open a Demat Account: Open a Demat account with a brokerage firm to hold real estate stocks. Investors can do so using the smallcase portal as well. 
2. Research and Select: Thorough research can help you identify suitable real estate stocks aligned with your investment goals. You can consider company performance, dividend yield, and market conditions. To identify top real estate stocks, you can use Tickertape’s Stock Screener with 200+ filters, custom features, and alerts. Monitoring news and managing your portfolio effectively to balance and mitigate risks is helpful.
3. Diversify Your Portfolio: Spreading risk by investing in various real estate sectors (residential, commercial, industrial) can help with diversification. Diversification can mitigate the impact of poor performance in any single investment.
4. Monitor and Review: Regularly monitor the performance of your investments and review your portfolio. Stay updated on market trends and company news to make informed decisions.
5. Stay Informed: Keep abreast of economic conditions, interest rates, and regulatory changes affecting the real estate market. Subscribe to financial news, attend webinars, and follow expert analyses for insights.
6. Consult Financial Advisors: Seek guidance from a financial advisor to tailor your investments to your financial goals and risk tolerance, particularly if you’re new to investing.

Invest in the Real Estate Sector Through smallcase

Investors can invest in real estate stocks through smallcases, as well! A smallcase is a basket of stocks or ETFs based on a certain theme/investment objective/sector. 

The Quantance Real Estate Stars smallcase, managed by Quantace Research, is an example. It is a portfolio of a concentrated treasure basket of 3-15 realty sector stocks selected from the Nifty Realty Index plus stocks in industries realty, construction, and construction materials from the top 750 total market index.

Quantace Real Estate Stars smallcase by Quantace Research

Disclosure for the Quantace Real Estate Stars smallcase.

Real Estate Sector Highlights from Union Budget 2024-2025

Finance Minister Nirmala Sitharaman presented the Union Budget 2024-2025, with significant initiatives aimed at bolstering the real estate sector. Here are the key highlights:

1. Pradhan Mantri Awas Yojana (PMAY): The government announced the construction of two crore additional affordable houses over the next five years under PMAY. This includes both rural and urban areas to address the housing needs of various demographics.
   • PMAY Urban 2.0: This initiative will address housing for one crore urban poor and middle-class families, with an investment of Rs 10 lakh crore, including a central assistance of Rs. 2.2 lakh cr. over the next five years. Additionally, provisions for interest subsidies to facilitate affordable housing loans have been made.
2. Transit Oriented Development: Transit-oriented development plans will be formulated for 14 large cities with populations above 30 lakh, along with implementation and financing strategies.
3. Rental Housing: Enabling policies and regulations will be established to enhance transparency and availability in rental housing markets. Rental housing with dormitory-type accommodation for industrial workers will be facilitated through public-private partnerships (PPP) with viability gap funding (VGF) support.
4. Stamp Duty Reforms: The central government will encourage states to moderate high stamp duty rates and consider further reductions for properties purchased by women.
5. Land-Related Reforms:
   • Rural Areas: Initiatives include assigning Unique Land Parcel Identification Numbers (ULPIN), digitising cadastral maps, and establishing land registries to facilitate credit flow and other services.
   • Urban Areas: Land records will be digitised with GIS mapping, and an IT-based system for property record administration and tax management will be established to improve the financial position of urban local bodies.
6. Urban Development: The government will collaborate with states to develop cities as growth hubs through economic and transit planning. Further, a framework for creative brownfield redevelopment of existing cities will be formulated to enable policies, market mechanisms, and regulation.
7. Long-Term Capital Gains: Long-term capital gains on financial and non-financial assets will attract a tax rate of 12.5%. The exemption limit for capital gains on certain financial assets will be increased to Rs. 1.25 lakh per year.
8. Andhra Pradesh Capital: Recognising the need for a capital in Andhra Pradesh, the central government will provide special financial support through multilateral development agencies, starting with Rs 15,000 cr. in the current financial year.
9. National Company Law Tribunals (NCLT): The Insolvency and Bankruptcy Code (IBC) has resolved over 1,000 companies, recovering Rs. 3.3 lakh cr. for creditors. Additional tribunals will be established to speed up insolvency resolution, with reforms to strengthen the tribunal and appellate tribunals.
10. PM Surya Ghar Muft Bijli Yojana: The scheme aims to install rooftop solar plants to provide free electricity up to 300 units per month for one crore households. The initiative has already seen over 1.28 crore registrations and 14 lakh applications.
11. Industrial Parks: The government will facilitate the development of investment-ready “plug and play” industrial parks with complete infrastructure near 100 cities, in partnership with states and the private sector. Twelve industrial parks under the National Industrial Corridor Development Programme will also be sanctioned.

Types of Real Estate Stocks

Real estate stocks encompass several sectors based on their core activities:

1. Residential: These companies focus on owning and leasing apartments, condos, and executive housing for tenants.
2. Commercial: Businesses that own, operate, or develop office and retail spaces catering to different enterprises.
3. Healthcare: Companies acquiring, constructing, or managing healthcare facilities like senior housing, assisted living, and post-acute care centres.
4. Speciality: Includes REITs investing in unique property types such as entertainment venues like arenas.

Who Should Invest in Real Estate Stocks?

Investing in real estate appeals to a range of investors seeking diversification and long-term growth. 

1. Those with moderate to high-risk tolerance and an understanding of real estate market cycles may find real estate stocks attractive. 
2. Real Estate Investment Trusts (REITs) offer steady income through dividends, making them popular among investors seeking income. Additionally, real estate stocks can serve as an inflation hedge, benefiting from rising property values and rental income during inflationary periods. 

Potential investors should conduct thorough analyses, considering factors like interest rates, economic conditions, and market dynamics, and prepare for market fluctuations. Setting investment objectives, assessing risk tolerance, and timing investments according to the real estate sector’s unique characteristics are crucial to making informed investment decisions.

Benefits of Investing in Real Estate Stocks

Investing in real estate stocks offers several advantages for investors:

• Diversity: Real estate stocks may allow investors to diversify their investments across a range of properties through a single share of ownership.
• Professional Management: Companies managing real estate portfolios may provide expert management focused on enhancing shareholder value.
• Liquidity: Publicly traded real estate stocks may provide easy access to property investments without the complexities of direct property ownership. They also offer quicker liquidity compared to physical real estate.
• Tax Benefits: Real estate companies generating passive income from leasing can enjoy favourable tax advantages.
• Regular Income: Investors in Real Estate Investment Trusts (REITs) typically receive regular dividends based on their investment size.
• Lower Entry Barrier: Compared to buying physical properties, investing in real estate stocks may require less initial capital, making it accessible to a broader range of investors.

Risks of Investing in Real Estate Stocks 

Investing in real estate stocks involves several key risks that investors should consider:

• Management Costs: Real estate companies may incur significant expenses for management salaries and benefits. This can reduce overall net operating revenue.
• Tepid Growth: Real estate investment trusts (REITs) can typically offer lower growth potential, as compared to other high-growth investments. Their main appeal lies in regular dividend payments rather than rapid capital appreciation.
• Interest Rate Risk: Real estate firms often use borrowed funds to finance their properties. Changes in interest rates can affect their profitability, as higher rates increase borrowing costs and may reduce dividend payouts.
• Market Volatility: Real estate stocks are known to be sensitive to economic cycles. During economic upswings, demand for property and rental income can boost stock prices. Conversely, downturns can lead to decreased demand, higher borrowing costs, and reduced occupancy rates, affecting stock performance.
• Regulatory Risks: Real estate operates within a complex regulatory environment influenced by political shifts and policy changes. New laws in zoning, environmental protection, and rental markets can significantly impact real estate firms’ profitability and operational strategies.
• Operational Risks: Real estate stocks’ performance depends heavily on management decisions. Poor property acquisition or maintenance choices can diminish investor returns, underscoring the importance of researching a company’s management history before investing.

Taxation on Real Estate Investments in India

Real estate, like other investments, has specific capital gains tax rules. Short-Term Capital Gains (STCG) tax applies to property held for less than 24 months, while Long-Term Capital Gains (LTCG) tax applies beyond 24 months.

STCG is taxed at the investor’s income tax slab rate for real estate. LTCG is taxed at 20% with indexation. Additional taxes include a 1% TDS on property sales over Rs. 50 lakh and mandatory reporting of sales over Rs. 30 lakh to the Income Tax Department.

Factors to Consider When Investing in Real Estate Stocks

Market Conditions

The conditions encompass the economic and financial variables influencing asset prices and investment decisions. These include economic growth, interest rates, inflation trends, global political developments, and investor sentiment. 

The dynamic nature of these elements plays a crucial role in shaping the investment landscape across various asset classes, including bonds, stocks, commodities, and other financial instruments. Understanding current market conditions is essential for making informed investment choices and assessing potential risks.

Project Portfolio and Growth Prospects

A diversified project portfolio is key for real estate stocks to mitigate risks and enhance growth prospects. Companies that invest across residential, commercial, and industrial sectors can tap into diverse market opportunities and adapt to changing economic conditions. 

This mix not only spreads risk but also positions businesses to capitalise on different market segments, thereby potentially increasing their overall growth potential and attractiveness to investors.

Location

The location of real estate investments significantly impacts their value and income potential. Properties in prestigious or high-demand areas typically command higher prices, yield better rental returns, and have greater potential for capital appreciation. 

Factors such as proximity to business hubs, accessibility, infrastructure quality, and amenities availability are critical considerations. Investors often prioritise locations that offer strong growth prospects and stability in property values over the long term.

Financial Performance

Assessing a real estate company’s financial health involves examining key performance indicators such as revenue growth, profitability margins, cash flow stability, and debt management. 

Strong financial metrics indicate a company’s ability to generate returns and signal stability and resilience in varying market conditions. Investors look for companies with consistent financial performance, which reflects their capacity to withstand economic downturns and deliver sustainable returns.

Management Team

A real estate company’s leadership and management team play a pivotal role in its operational efficiency and strategic decision-making. Competent and experienced leadership fosters effective project execution, risk management practices, and prudent financial stewardship.

A strong management team enhances operational excellence and instils investor confidence by upholding high governance standards, transparency, and ethical conduct.

Regulatory Environment

The regulatory landscape governing real estate operations and transactions shapes the industry’s operational framework and investment attractiveness. Clear and stable regulatory policies provide a predictable business environment that supports growth and investor confidence. 

Investors favour markets with transparent regulations that protect property rights, ensure fair dealings, and facilitate ease of doing business. Understanding the regulatory environment is crucial for evaluating the risks and opportunities associated with real estate investments in different jurisdictions.

To Wrap It Up…

Investing in Indian real estate stocks offers the potential for value appreciation and dividends, but it requires careful stock selection, detailed research, and an understanding of the regulatory landscape. Notable real estate companies are setting new industry standards with their commitment to quality, innovation, and customer satisfaction. This article has, therefore, discussed the different types, features, benefits and risks of investing in real estate stocks!

Frequently Asked Questions About Real Estate Stocks