Quote on Q1FY26 Real Estate by Pankaj Kumar, VP-Fundamental Research, Kotak Securities
Below the Quote on Q1FY26 Real Estate by Pankaj Kumar, VP-Fundamental Research, Kotak Securities
Listed residential developers delivered their strongest-ever quarter in Q1FY26 with aggregate pre-sales of our universe was at ~Rs43,200cr (+45% YoY), achieving 31% of the FY26 target of Rs1.4 lakh cr and further strengthening market share. Prestige (~Rs12,100cr, +300% YoY) and DLF (~Rs11,400cr, +78% YoY) drove momentum, while Godrej and Brigade saw relatively muted growth. At the industry level, sales grew a modest 9% YoY in Q1FY26, supported by higher realizations (+13% YoY), though volumes declined 4% YoY to 23.8 cr sq. ft, led by weakness in Pune, MMR, and Hyderabad. NCR remained a bright spot with 43% YoY growth. Launches fell 12% YoY to 22.9 cr sq. ft, keeping inventory at ~150 cr sq. ft (~1.5 years of sales). With a robust ~Rs1.8 lakh cr launch pipeline, strong balance sheets, and low leverage, listed developers are well-positioned for sustained growth and market share gains. Valuations for most residential real estate stocks stand at 7-10X adjusted EV/EBITDA (FY27E). Despite moderating industry volume trends, we remain constructive on listed developers, driven by geographical expansion and market share gains. We like DLF, Brigade, Lodha, and Prestige as preferred picks.
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