Real Estate Stocks Drop Amid Market Volatility: Macrotech, DLF, and Oberoi Realty See Major Losses

The Indian real estate sector is currently facing a downturn, with major developers such as Macrotech Developers, DLF, and Oberoi Realty experiencing significant declines in their stock prices. The Nifty Realty index, which tracks the performance of key real estate stocks, has dropped nearly 5%, driven largely by the poor performance of these prominent companies. 

Macrotech, DLF, and Oberoi Realty have seen their stocks fall by 3-6%, reflecting a broader trend of market volatility and investor concern. With shares of Macrotech and Oberoi Realty witnessing sharp losses, the sector’s outlook is now under heightened scrutiny as these companies grapple with both internal and external challenges.

Macrotech Developers, one of the key players in the Indian real estate sector, saw its stock fall by 6% on. This decline followed the news that Abhishek Lodha, the CEO of Macrotech, had filed a lawsuit in the Bombay High Court against his younger brother, Abhidandan Lodha. The lawsuit seeks to prevent Abhidandan from using the 'Lodha' brand name, a move that could have significant implications for the company's future branding and operations. According to CNBC-TV18, the High Court had instructed to restrain Abhidandan Lodha from marketing or selling any products under the same name. The dispute between the Lodha brothers has raised concerns about Macrotech’s brand equity and market position.

Meanwhile, DLF, another prominent player in the Indian real estate market, also posted negative returns for the past four weeks. The company's stock was affected by overall market sentiment, compounded by concerns regarding the broader real estate market's performance.

Oberoi Realty, which had delivered positive returns from September to December 2024, has been one of the hardest-hit companies in January 2025. The stock saw a sharp decline of over 24%, with nearly 8% falling in a single day on January 21. This drop followed the release of the company’s Q3 FY25 results, which did not meet market expectations. Despite a 71.7% year-on-year increase in net profit to Rs 618.4 crore, compared to Rs 360.2 crore in Q3 FY24, Oberoi Realty's performance failed to impress investors. Revenue from operations rose by 34% YoY, and EBITDA surged by 68% to Rs 856 crore from Rs 509.5 crore last year. While the company declared a third interim dividend of Rs 2 per equity share, the market reaction remained bearish.

The real estate sector has been under pressure due to a variety of factors, including broader macroeconomic concerns, regulatory issues, and challenges related to liquidity and demand. The government's fiscal policies, including plans in the upcoming Union Budget 2025, are expected to play a key role in shaping the market in the near term. Analysts are calling for targeted policy measures to address affordability, liquidity, and investment in the real estate sector.

The upcoming Budget 2025 is expected to bring significant changes to the housing sector, particularly for first-time buyers. Experts suggest that a combination of targeted tax benefits and innovative financial incentives could make homeownership more affordable. Key proposals include reducing interest rates, offering tax rebates on long-term capital gains, and incentivizing states to lower stamp duties. These measures could make housing more accessible and boost demand, especially in the affordable housing segment.

Additionally, with India’s real estate sector valued at over $477 billion and projected to reach $1 trillion by 2030, policy reforms are anticipated to enhance liquidity and attract both domestic and foreign investments. Reducing long-term capital gains taxes and streamlining REIT regulations are seen as crucial steps to help developers access capital more competitively, while also benefiting homebuyers with improved interest rate rebates on housing loans.

For now, the overall sentiment in the real estate market remains cautious, and the sector continues to navigate significant challenges. Despite strong fundamentals and growth potential in the medium term, volatility remains a concern for investors, particularly as uncertainty looms over macroeconomic conditions and regulatory changes.