Is India's Basic industry under-valued?

For the past 3 years a number of Real Estate Developers have hit the capital market with their land bank theory and future development plans. However, strange as it may sound, the Indian Industry mainly the auto sector has been sitting upon massive Real Estate for close to 5 decades. Can it be argued that the Real Estate banks of the Indian Industry ought to be valued at similar levels as Real Estate Developers and consequently the Basic manufacturing industry stocks are under-valued?

It is very interesting to see that the market cap of the top 5 Indian Companies is equal to the market cap of one Indian real estate company, that apart, the land bank of the top 5 Indian Auto companies is almost same as the land bank of One Indian Real Estate Company.


The top 5 Indian Auto companies have been manufacturing different auto vehicles for at least 3 decades and more and the Indian real estate company has been in business also for more than two decades but this real estate company made its stock exchange debut only couple of months ago, where as all the auto companies have been at some point of time been the darling of the investor over the last 3 decades or more.

What does this mean? Is DLF over valued or are the top 5 Indian Auto companies undervalued?
With auto financing rates between 12-15% in India , the auto companies have seen a slowdown in their monthly sales numbers. However, the consensus that is emerging in India is that, interest rates have peaked for the immediate future and therefore the financing rates should not go up from these levels. Saying this TATA motors has corrected more than 25%, Bajaj Auto has corrected around 15%, M&M has corrected around 30%, MUL has corrected around 15% and HH has corrected around 15% YTD respectively.

On comparing the top 5 Indian Auto Companies with one Indian Real Estate
Company, a very interesting story emerges:

Auto Companies Land Bank (approx) Market Cap

TATA Motors (TTMT) 3500 acres US$ 6 bn

Bajaj Auto (BJA) 1500 acres US$6 bn

Mahindra & Mahindra (M&M) 3000 acres US$ 4 bn

Maruti Udyog Ltd (MUL) 1000 acres US$5 bn

Hero Honda (HH) 1000 acres US$3 bn

Total 10000 acres US$25 bn

Real Estate Company

DLF Ltd 10800 acres US$25 bn

Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.