It's three to tango! Stocks that can return more than 60% in a year

Market outlook is uncertain, thanks to the coming general elections. How the markets will behave in the run-up, experts are starkly divided; with some betting on a surge and others predicting otherwise.

Here are three stocks that brokers say can return more than 60% in the next nine to 12 months:

DLF

Religare maintains 'buy' rating on the stock after the company achieved the debt target, which is a key positive.

The risk-reward ratio also remains favourable given the improved balance sheet and rental assets.

Adani Enterprises

The stock after giving a breakout in December completed a pullback in January and February and is on the verge of resuming its uptrend. Mitesh Thacker advises investors to accumulate the stock with a stop loss of Rs 220 and look for a target of Rs 400-420.

Delta Corporation

This stock has also has given a pullback to its breakout levels of around Rs 95 with last week's low at about Rs 97. Investors can look at accumulating the stock around Rs 100-102 mark.

The stock remains in a long term uptrend and Mitesh Thacker is of the view that the stock can test levels of Rs 170 to 180 in the next six to nine months. I would suggest accumulating with a stop below Rs 78.

Here's what experts say about how markets tune to the elections:

Rakesh Tarway, VP and Head of Equity Strategy, Equity and Derivative Products, Motilal Oswal Securities

"A hung Parliament would be a bad option for India as a country and market will not like Third Front as it brings political instability."

"Third front will not be a better option for political scenario. But too many aspirants for PM, will limit its success post poll."

Rajesh Sharma, Founder & Director, Capri Global Capital Ltd.

"Any further prolonging of this situation (on economic front) will certainly widen the gap between developed economies and Indian economy which is aspiring to become one of the largest economies of the world."

"Towards achieving this goal our IIP should grow in double digit and GDP growth should be at least around 8.5 per cent. This will not be possible with political situation of hung Parliament."

Siddharth Sedani, Vice President-PMS at Microsec Capital Ltd

"Although, we see few green shoots in the economy in last couple of months. Investor should utilize the opportunity to accumulate quality companies on dips ahead of elections due to volatility."

"Automobile, Export oriented companies and Infrastructure can be growth drivers in quarters to come."

Dolat Capital

"The elections will at least bring back some level of confidence back for key stakeholders, and then it is up to the actions of the new government; how much and how quickly we recover to the trend line growth."

Vikas Khemani, CEO, Edelweiss

"Most of the activity seems to be building around the belief in the political outcome. Some of the surveys have come out and incrementally there is a belief of a strong political sort of outcome that is getting built into the market albeit in a slow and steady manner."

Ambareesh Baliga, Managing Partner-Global Wealth Management, Edelweiss Financial Services

"We have been bullish on the market for a while, and talking about the pre-election rally."

"The pre-election rally that we all are waiting for should take us to new highs. I will not be surprised if we see levels of closer to about 6,500-plus in the next one and a half, or two months."

Source: http://articles.economictimes.indiatimes.com/2014-02-27/news/47740048_1_motilal-oswal-securities-rs-170-delta-corporation

US hedge fund Capri Capital plans to launch realty PE fund in India

US-based hedge fund Capri Capital Partnersplans to launch its first India-dedicated real estate private equity fund to raise about $400 million, two people familiar with the development said.

Capri Capital, which advises pension funds and institutional investors globally, has $3.7 billion assets under management.

It is looking to raise the fund through its India arm, Capri Global Capital, after the upcoming general elections. The offshore fund will focus on investing in affordable housingprojects across the country, the people quoted earlier said.

Quintin Primo III, chairman & CEO of Chicago-headquartered Capri Capital, refused to share details of the fund raising plan. He, however, said Capri Global Capital is working on the "right" investment strategy in India.

"We want to aggressively expand that platform. We hope to secure various sources of capital in the next 12 months including equity, debt, private equity format and also through joint ventures," he said. Capri Global Capital is a listed non-deposit accepting systemically important non-banking finance company (NBFCs-ND-SI) focused on wholesale, small and micro enterprise lending. Large global institutional investors, with few exceptions such as Blackstone Group, have been keeping away from the Indian real estate sector given the current scenario.

However, according to Primo, Indian real estate is throwing up good opportunities due to tough liquidity situation and Capri is aiming to tap this growth.

Source: http://articles.economictimes.indiatimes.com/2014-02-07/news/47126611_1_hedge-fund-equity-fund-offshore-fund

Capri Capital bets on India; plans dedicated realty fund

Large global institutional investors seem to have a developed a renewed interest for Indian realty. The latest in the list is Chicago-headquartered hedge-fund 'Capri Capital Partners' which has big plans for growing in country through its India arm - Capri Global Capital. Considering this, CNBC TV18's Manasvi Ghelani finds out what's attracting global investors to Indian realty at a time when domestic banks are shying away from exposing themselves to the sector.

With domestic investors and banks cautious of lending to the Indian real estate sector given the current economic scenario, foreign investors are coming to the rescue. So after Blackstone, its US based hedge fund Capri, which is now investing big in India through its arm - Capri Global Capital.

The company has recently signed a deal with real estate developer Monarch Universal Group to fund Rs 45 crore for two residential projects in Roadpali and Kalamboli in Mumbai.

Besides, in the last nine months Capri has invested a total of about Rs 200 crore for partnerships with Marvel Group in Pune, CHD Developers in Delhi and Ozone & Unishire Group in Bangalore.

Reports also suggest, Capri is planning to launch its first India-dedicated real estate private equity fund to raise about USD 400 million soon after the elections.

And the management says their strategy is already yielding positive returns.   

“The banks pulled back and that gave us the opportunities to step up so we had significant appointment of capital in the last 12 months. We have experienced very strong credit performance, in terms of delinquencies, they have been very low. We have been able to generate 20% of returns on monies we have let out in the market,” Quintin E Primo III, Chairman, Capri Global Capital says.

On the other hand this is good news for cash-strapped Indian developers as well.

Sanjay Dutt, Executive MD - South Asia, Cushman & Wakefield says: “It is important that you to de-risk your projects and basically have equity partnership and therefore not necessarily invest too much money from your pocket. So that has resulted in a lot of play between developers and PE firms.”

But despite this renewed interest from global investors, analysts say more needs to be done to help developers and all eyes are now on the new government's policies post elections to see if it can get in more FDI for the realty sector as well as push through REITS.

Source: http://www.moneycontrol.com/news/cnbc-tv18-comments/capri-capital-betsindia-plans-dedicated-realty-fund_1039653.html?utm_source=ref_article

Capri Global Capital Limited (CGCL) funds Monarch Universal Group projects for INR 45 crore

• CGCL is participating in construction finance for 2 Projects being developed by  Monarch Universal Group in Kalamboli, Navi Mumbai
• Capri Global to continue focusing on the residential real estate projects

Capri Global Capital Ltd (CGCL), one of the country’s leading non-deposits accepting, non-banking finance company, headquartered in Mumbai has entered into a deal with Monarch Universal Group to fund two residential developments in Roadpali, Kalamboli. Monarch Universal Group is a well-known developer with a track record of delivering residential and commercial projects primarily in Navi Mumbai area.

Mr. Ramesh Kelkar, Head of Risk, Wholesale Lending, Capri Global Capital Limited said, “This transaction is a testimony to the fact that residential developments on the outskirts of Mumbai where there is an emerging market for quality real estate and will continue to attract interest of financial institutions. Monarch Universal Group is a well-respected group of Navi Mumbai and has delivered several large residential projects in the past. We are excited to support Monarch Universal Group for these projects and are actively looking at similar deployment opportunities across India over the next few quarters”.

While the demand in 2013 for residential real estate was subdued, in 2014, CGCL believes, in the mid-income housing segment, the market will continue to remain attractive, for the products which are realistically priced. The Company intends to focus primarily on such projects to provide finance, Mr. Kelkar added.

RBI may target inflation with yet another rate hike: Rajesh Sharma

It could be a week of double whammy for the Indian markets. While the Reserve Bank of India looks almost certain to raise the benchmark Repo Rate by another 25 bps tomorrow, upbeat economic data from the US means that the Federal Reserve may start to unwind its massive bond buyback programme sooner than later. The US Fed meets on Dec 17-18 and any indication of a rollback could roil global financial markets.

Back home, mitigating inflation continues to be RBI’s biggest challenge. With retail inflation well above 11% and wholesale inflation hovering at 7.5%, it will not come as a surprise if RBI Governor Raghuram Rajan yet again uses the central bank’s time-tested tool of hiking interest rates at the mid-quarter policy review.

A 25 bps rate hike tomorrow will be the third such increase since Rajan became governor in September and will push the Repo Rate to 8.0%, a level last seen in April 2012. The successive rate hikes is bound to push up lending rates and further hurt economic growth, which has already seen a sharp deceleration. Expect home, auto and commercial loans to become costlier while steps, if any, to ease liquidity may not help much.

When Rajan took charge at Mint Street, the markets had expected the new governor to usher in some radical changes and infuse fresh thinking in the central bank’s approach to the growth-inflation dynamics. Yet, to be fair to Rajan, his options in a high inflation, gigantic economy are severely limited and willy-nilly, he has to walk down the beaten path.

Just a few days back, Rajan had clearly spelt out his agenda when he told a group of institutional investors in New York that inflation “is and will remain the key priority of monetary policy” and that efforts will be “firmly” on controlling prices.

The government too is expected to agree with RBI’s assessment for a need to raise rates to counter inflation. After the recent assembly election results where the ruling Congress fared poorly, the government realizes that inflation is hurting the common man much more than previously thought. With general elections just 3-4 months away, the immediate challenge is to douse prices.

With the government and the central bank on the same page, a rate hike, seen as the panacea for all inflationary ills, looks imminent. Brace for Repo Rate at 8%.

Luxury Housing Trends in India

Affluent home buyers want their home to reflect the financial and social standing. Accordingly, premium and luxury segment in India has seen unprecedented rise and growth and developers are pouring into cater to the increasing demand. Premium homes today no longer means only expensive units which are centrally located, large and comfortable, but provide you respite from the city's hustle and bustle. Demand for luxury homes in India is growing and the premium segment has grown to a whole new dimension adorned with innovative modern technologies. They have become a lifestyle statement for the desiring affluent class.

Rapidly growing high net-worth individuals (HNIs), increased aspirations and changing lifestyle are the factors behind luxury living being redefined in India. Premium homes boast of increasing demand due to rising income level and affluent lifestyle desired by young professionals. As the buyers are increasingly demanding luxury living experiences imbued in the residential units, developers are coming up with more and more premium homes. And when it comes to his dream home, super luxury is the ultimate deal clincher. Developers, on their part, are trying to outdo each other in breaking fresh ground in this exclusive segment.

Describing super luxury

So, how does one define super-luxury living? Going by what developers and architects have to say, there are a host of contributing factors, ranging from design, size and facilities to the location of the property.

Location is a key factor. Almost all luxury properties in the heart of the city claim to provide paradise like comfort and free from chaos . But, as Anuj Puri, chairman and country head, Jones Lang LaSalle India explains, the ideal location would be within the heart of the city, not on its periphery. "Customers want their homes to be located within the city, but the moment they step into the compound, they should be transported away from it. The view, the calm ambience - is the clinching factor."

Developers, on their part, are trying to outdo each other in breaking fresh ground in luxury. From a typical golf-based project to spa-based, wellness or destination-based, they are experimenting with various themes. "The trend is to focus on exclusivity - which, generally, an independent villa provides," says J C Sharma, vice chairman & managing director, Sobha Developers.

Builders are translating this exclusivity quotient into enclave format, modelled on East Asian luxury villa developments in Bali, Phuket, Koh Kood, etc. The key here is to have fewer units, in 25 to 50 range, with larger plot sizes, giving the privileged residents the much sought-after privacy and physical and visual space.

"Generously proportioned homes offering an un-obstructed and breath-taking view are a key consideration for a luxury home. Developers thereby provide large apartments and condominiums associated with luxury," states Sanjay Raj, CEO and ED, Golden Gate Properties. 

Furthermore, these residences are also seeing the influx of global luxury brands. Indian developers like Lodha Group, Oberoi Realty, Prestige Group, DLF, Rohan Lifespaces etc. are partnering with these brands offering products in the apartment and condominium space. This includes the entry of super-luxury brands like Marriot, Ritz Carlton and Four Seasons in Bangalore, Armani in Mumbai and Swarovski and Trump in Pune.

At the end of the day, however, the two most important features needed for a super luxury apartment remain a lot of space and a prestigious address.

The Target Segment:

India has over 85,000 Ultra High Net worth Individuals (UHNIs) and their numbers are fast swelling. Be it the designer clothes they wear, the swanky cars they drive or the extravagant holidays they take, the young and rich believe in the credo of instant gratification. And when it comes to their living space, they will settle for nothing but the most exclusive and expensive. However, money is not the only criteria to ensure entry into these projects. Developers are very conscious of maintaining the exclusive quotient of their clientele. So, many of these luxury homes are 'by invitation only,' one of them being Lodha Group's 'World One', touted as the World's tallest residential towers. The same exclusivity has been maintained at DLF's super plush project 'The Aralias' in Gurgaon where only a select few have been invited to become a part of this lavish lifestyle.

The dynamics of the super luxury segment are radically different from the rest of the residential market. For this segment, the higher the ticket size, the more exclusive the property becomes as it is less accessible to the masses.

According to Uzma Irfan, executive director - corporate communication, Prestige Group, "High-end homes have today evolved into a statement among the discerning consumer. Such homes are not just about pricing but the result of several qualities, starting with the aesthetics to the amenities to signature styles and so on."

"Someone looking at a Rs5 crore home is not really looking at a bank loan," claims Kruti Jain of Kumar Urban Development Ltd.. "They always buy these homes out of profits they make in their business and excess income;. And since the supply is also limited, it's in tune with the market demand", she adds.

Price tag of Luxury Homes differs across cities:

Needless to say, super luxury comes with a heavy price tag. And homes for the ultra-rich clearly reflect it. These homes are mostly priced at Rs 5 crore and may go up to Rs 25-30 crore depending on location and other specifications.

Affirming this, Mukesh Bhagtani, CEO, of Jaycee Homes says, "Pricing largely depends on the location. In addition are amenities, the type of construction and the interiors. Developer also tries to keep it unreachable from the masses by attaching a large premium to the price. Only then it becomes exclusive."

Going by the varied markets across metros super luxury housing is priced differently. In Bengaluru, anything above Rs 6000 per sq ft could be considered ultra-luxury. But it may not be the same in Mumbai where prices above Rs 15,000 per sq ft come under the super-luxury bracket. On an average, the pricing of a super luxury apartment would be from Rs 8 crore onwards. Whereas in tier-II cities houses above Rs 3 crore come under this segment while in a tier -III city anything upwards of Rs 1 crore will be considered super luxury.

Being a niche market, the demand for super-luxury housing is not volatile. The segment remains unaffected by hardening interest rate stance taken by RBI.

Major Luxury Housing Markets: Mumbai and NCR

Historically, Mumbai has not just been the financial capital of India but also the 'luxury capital' of the country. Mumbai's strong real estate market fundamentals are reflected in all segments, from office space and luxury retail, to luxury housing. Although the port city is constrained for space, it continues to dominate other property markets across India and remains the first choice for luxury brands, film stars, multinationals and global conglomerates. Across the world, luxury destinations have flourished as extended suburbs of the main city, thus supplementing the main city. For instance, in the Delhi-NCR region, Gurgaon has fared better than Delhi as a luxury destination. In contrast, a port city like Mumbai does not have that luxury. Despite this, Mumbai has witnessed the maximum number of entrants into the luxury segment in the last one year.

Devang Varma, director of Omkar Realtors & Developers, insists that Mumbai will not lose its tag of the luxury capital of India for quite some time. Poor infrastructure is an issue in Mumbai and new cities like the NCR are coming up but Mumbai is definitely not sliding on this front. In fact, a lot of redevelopment projects in Mumbai are offering luxury residential houses, he says.

Mumbai, Pune, Bangalore, Delhi, Gurgaon and to a certain extent Chennai are the most responsive markets for luxury housing today. Currently, the overall demand for luxury housing is stable.

"To a certain extent, the growth in new cities has been better than in Mumbai but even in these locations, infrastructure development has not kept pace. Consequently, these locations are also becoming congested. Although there is a perception that multinational brands now prefer emerging markets to Mumbai's saturated market, the fact is that the money is still in Mumbai, with NCR being a strong alternative," explains Varma. Bangalore, Pune, Hyderabad and Chennai are preferred, more as 'test run' destinations, he adds.

Abhay Kumar, CMD of Grih Pravesh Buildteck, also believes that it is too early to say that these new destinations can match Mumbai. Nevertheless, he agrees that the luxury real estate market is not exclusive to Mumbai any more. These other cities have various limitations, as far as super-premium projects are concerned. They still lag behind Mumbai with respect to professionalism and transparency in dealings. Political will also plays a major role, explains Kumar. "Delhi and Mumbai remain the favourite destinations for large government projects and installations and this creates demand for realty in a big way," says Kumar.

Although emerging cities have several advantages, some analysts believe that these destinations have been unable to create an image that attracts luxury brands and financial institutions. Regulatory provisions in Mumbai may be a far cry from what is desired for real estate. Yet, the city has an aura associated with luxury living. Moreover, one needs to understand the psyche of an investor. No market has given better returns on investment than Mumbai's luxury real estate segment. With several upcoming and planned infrastructure projects, the push towards redevelopment and taller buildings, Mumbai seems set to retain its top position in India's luxury realty market.

Luxury with Unique Positioning:

When it comes to providing amenities to a demanding clientele, sky is the limit. On offer are niche services that are a step-up from a lifestyle that the affluent class has already been exposed to.

Luxury segment offers a range of homes to the target buyer – apartments, penthouses, villas, row houses, bungalows, etc. They are usually laced with green spaces, parks or golf courses. 

Branded luxury homes 

Innovative techniques are being introduced in luxury segment by developers. Branded residences are an important emerging concept in luxury housing, which are developed by developers in collaboration with international luxury hospitality or lifestyle brands. In some cases, developers may even tie up with celebrities for branded residences.

For the World Towers residential project in Mumbai, Lodha Group has collaborated with Italian designer Giorgio Armani’s interior design studio, Armani Casa. The project is the tallest residential tower in the world and apartments and mansions are priced around Rs 12 crore and Rs 75 crore respectively. 

Golf/ Polo courses 

High rises with well maintained golf courses in the posh localities of a city has been regarded as symbols of high living. Golf courses stand for affluent lifestyle and social status. Now developers have moved from the stereotyped golf grounds to polo grounds to give the luxury homes a posh status.

M3M India paves the path for other developers to follow as they have come up with the first polo themed project in India. M3M Polo suites offer exclusive concierge services to residents which include hiring/leasing of horses to the interested polo players. M3M India signed an agreement with Equisport, a pioneer polo sport agency, to give a unique polo living experience to the residents.

Themed villas

Theme based housing is new trend in Indian realty market. Theme based villas are the latest fads to impress potential luxury home buyers. Luxury villas are attached with a distinct snob value in congested big cities. Developers like Emaar MGF, DLF have come up with projects based on various architectural themes. Different architectural and cultural elements from different societies like Mexican, Spanish, Arabic, etc are imbued in these residential villas. Marbella, developed by Emaar MGF, is one such project which houses 4/5 BHK villas build in Spanish style. Theme based residential luxury villas in Bangalore, Delhi, Mumbai, Gurgaon, Pune and Chennai have attracted NRI buyers from West Asia, Singapore, etc.

Smart Homes

Developers are keen to incorporate technological advancement into the realty scenario. Latest technology and gadgets have been used to create intelligent living spaces inside the apartments/villas. Prominent features of luxury housing includes digital locks, electronic surveillance systems, temperature control, wireless communication for Internet, in-house entertainment, etc.

The emphasis is to create intelligent and smart home in a techno savvy era. Systems with sensors are being used for controlling light, ambiance and temperature inside the house. Technology is used to provide a galore of specialized services – from concierge services to medical consultation.

Vertical growth of luxury homes

As land is scarce in central areas of most of the big cities in India, luxury homes are being developed vertically – sometimes an apartment built over an entire floor. The luxury homes come with terraced gardens, indoor swimming pool, private lounges, etc. Bathroom fittings and kitchen interiors are of excellent quality and some of the developers have come up with ultra luxury services like exclusive lift and automatic teller machine.

Developers are even coming up with customized homes like boutique luxury homes which are set to redefine living experiences for residents.

(Sources: Realty Plus – October 2013, Moneycontrol.com 20^th August 2013, Commonfloor.com – 4^th January 2013, Track2 realty.com)

Mr. PH Ravikumar, MD, Capri Global Capital Ltd on the RBI’s Q2 Monetary Policy Review 2013-14

The RBI measures are in line with market expectations and in fact market is relieved that the Repo Rate increase is not higher than the 25 basis points announced. The measures to cut MSF by 25 basis points is to ensure that cost of liquidity is kept lower. In that sense with the change in regime at RBI, RBI is now looking at growth imperatives as well. Already with 0.5% of NDTL as overnight repo eligibility, another 0.5% of NDTL as export refinance and the now announced increase of term repo for 7 to 14 days eligibility (from 0.25% to 0.50% of NDTL), RBI is ensuring sufficient liquidity particularly during current festival season and as we enter the busy season.

With wholesale inflation being under 7% and consumer inflation stubbornly ay 9% plus levels with food inflation at decades high of 18% plus! there is no way interest rates are slated to come down, notwithstanding infusion of 14,000 crore plus infusion as capital in PSU banks.

One only hopes that the current somewhat benign crude oil prices, better control on CAD continues so that the external Rupee value is stable. All in all credit/funds flow to agri and SME sectors has to be ensured as one sees some signs of revival in services sector and good growth in agricultural sector.

The Reserve Bank of India’s move to revise the repo rate upwards by 25bps has not been received well by the real estate development fraternity, which hoped for a rate cut or a status quo in a market scenario where banks and financial institutions have already started increasing lending rates for home loans. Given the festive season is traditionally the period where the real estate sales are driven up by sentiment, this revision is not welcome; reviewed objectively though, the decision of the Central Bank is justified given its primary focus on taming inflation. In the short term with financial institutions revising interest rates and on the back of already high real estate costs, demand for real estate will continue to be depressed.

Source: http://www.thehindubusinessline.com/industry-and-economy/banking/more-policy-rate-hike-likely-in-december/article5286073.ece