20% Price Fall - According to Citi

According to Citigroup Analysts tracking the Indian Real Estate Space, till now there has been 20% correction in Realty Prices which they account for in estimating the NAV of various Realty stocks. What is really surprising is Sobha Developers land bank has fallen from around 4,000 acres to about 3,300 acres as the company is reconsidering some of its land deals where it has not fully paid up, given current difficult markets.

Here are the excerpts from the reports,

Citi on Bangalore / Chennai based Purvankara Projects,

....NAV estimate of Rs104 is based on the following assumptions: 1) 20% decline in property prices; 2) 15-24month delay in project execution.....

Similarly for Delhi NCR and North India based Parsvnath Developers and Ansal Properties and Infrastructure,

....Our NAV estimate assumes: a) 20% decline to current market prices; b) development....

Goldman Sachs in its report said 2Q earnings reflect slowdown. Citi has cut the target prices substantially for all Realty Stocks. DLF's new target is Rs 340 from Rs 585 and that for Unitech is Rs 57 from Rs 193 :-)