On Monday, shares of real estate companies got a strong blow and dropped up to 4 per cent on the National Stock Exchange (NSE) in spite of the 25 bps repo rate cut by the RBI on Friday. DLF, Godrej Properties, Prestige Estate Projects, and Anand Raj were each 4 per cent down, whereas Macrotech Developers (Lodha), Sobha, Brigade Enterprises, and Oberoi Realty decreased by 1–3 per cent approximately.
The Nifty Realty index, the most affected sectoral index, was 2.7 per cent lower at 11:33 AM, while the Nifty 50 had only a 0.5 per cent loss. The realty index has been going down for the last month that it is now 8 per cent lower against a 2 per cent rise in the benchmark index. The last six months have also been quite gloomy for the index, which has lost 16 per cent, while the Nifty 50 has been on a 4 per cent rally.
Why Real Estate Stocks Are Underperforming?
As per Bsiness, Standard, Analysts at YES Securities said, “launches across key regions remained soft during the month of October 2025. At pan-India level, new launches (msft) were down by 34 per cent year-on-year (YoY) & in unit terms the same was at multi-month low.” They added that absorption remained steady during October 2025 at ~80.55msft, in-line with the average run-rate of the past 12-months. Consequently, inventory levels remained under control at ~15.6 months. While we witnessed minor price contraction in new launches, the average pricing of new sales inched-up higher.
“In the July to September quarter (Q2FY26), our real estate coverage universe saw a marginal 3 per cent YoY dip in pre-sales bookings owing to absence of new launches from most developers and extended monsoon season. Sustenance sales and collections remained healthy,” said analysts at ICICI Securities.
Despite a soft H1FY26, companies remained confident of achieving annual pre-sales targets, led by a strong project launch pipeline for H2FY26, skewed towards Q4FY26, the brokerage firm said.
Meanwhile, residential real estate stocks under Kotak Securities coverage delivered another strong quarter in Q2FY26, reporting 43 per cent YoY growth in pre-sales, while H1FY26 pre-sales rose 44 per cent YoY, reaching 53 per cent of the full-year target of ~₹1.4 trillion (+20 per cent YoY). This robust momentum was led by DLF, Godrej, Sobha, and Prestige. In contrast, the broader industry saw a moderate 11 per cent YoY sales increase in Q2FY26, driven entirely by higher prices, as volumes remained flat at 236 million sq. ft.
Looking ahead, Pankaj Kumar, VP & Analyst Fundamental Research, Kotak Securities, said, “high-end residential demand may see moderate slowdown due to sharp price rises and softer sentiment among IT-sector linked buyers, though medium-term housing prospects remain strong.”
Meanwhile, CRISIL Ratings noted that DLF faces cyclical cash flow fluctuations, as cash outflow towards projects and debt obligations are relatively fixed. Occupancy and rental rates remain susceptible to economic downturns, which could constrain tenant business risk and rental collections.
The rating agency also highlighted DLF’s heavy reliance on the Gurugram real estate market, though the company has a strong brand and is focusing on geographical diversification, including re-entry into Mumbai and planned launches in Goa, Gurugram, and Tricity (Chandigarh, Mohali, Panchkula).
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