Laborers work on an Indiabulls Real Estate Ltd. commercial building construction site in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Indiabulls Real Estate Expensive Yet Attractive?

Indiabulls Real Estate Ltd. has fallen nearly 23 percent so far this year but still trades higher than its two-year average price-to-earnings multiple. Still, analysts consider it the best bet among real estate stocks.

The company offers the highest return potential among peers, according to a consensus of analysts tracked by Bloomberg. That’s when the real estate basket faces selling pressure with the Nifty Real Estate index declining 20 percent year-to-date— eight of the 10 stocks ending in the red.

At a price-to-earnings multiple of 18.5, Indiabulls Real Estate trades at a 30 percent premium to its two-year average. That’s the highest premium to the two-year average compared to its peers in the Nifty Real Estate Index.

Indiabulls Real Estate Expensive Yet Attractive?

Indiabulls Real Estate in March had agreed to sell a 50 percent stake in its prime commercial properties in Mumbai to global private equity investor Blackstone Group at an enterprise value of Rs 9,500 crore. Morgan Stanley had then said the deal sets Indiabulls Real Estate on a path for complete deleveraging of the residential business. The brokerage, which has an ‘Overweight’ rating on the stock, said the scrip should significantly re-rate in the next few quarters as earnings scale up.