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Sectoral Overview:

Developers: Steady Demand, Supply Momentum Builds

* Pre-sales: Housing sales across India’s top seven cities declined ~7% QoQ but rose 9% YoY to 1,01,675 units in Q4FY26. In value terms, sales fell 5% QoQ yet grew 6% YoY to INR 15.1 Bn. The sequential weakness reflects global uncertainty, rising cost and softer demand from Middle-eastern investors – traditionally a key contributor. Most markets saw QoQ declines; Hyderabad was broadly stable, Chennai was down the most (-18%); NCR, Pune, and Kolkata fell 8–10% each. Despite this, Chennai recorded the strongest YoY growth (+31%) on a low base. MMR and Bengaluru together contributed ~48% of total sales this quarter

* Launches: Housing supply remained resilient in Q4FY26, with launches at 1,26,265 units, up 2% QoQ and 26% YoY. MMR and Bengaluru drove over half of total additions. Hyderabad posted the strongest QoQ growth (+46%), while Chennai, NCR, Pune and Kolkata saw declines. Developers continued to focus on mid and premium segments – units priced at INR 15–25 Mn formed 32% of supply, followed by units above INR 25 Mn at 20% – with limited traction in affordable housing (below INR 4 Mn)

* Inventory: Unsold inventory across the top seven cities rose 4% QoQ and 7% YoY to over 6,01,000 units by end of Q4FY26. Bengaluru recorded the highest increase in unsold stock, with inventory rising 12% QoQ and 24% YoY, followed by Hyderabad

* Average Price Realisation: In spite of a slowdown in sales, residential price continued to inch up, rising 2% QoQ and 7% YoY across the top cities. Driven by increased supply in the luxury and ultra-luxury segments, NCR recorded the highest annual price appreciation of over 15%, followed by Bengaluru with a 8% rise

* SOBHA is our top investment idea, the rationale being robust launches, healthy pre-sales, a strong balance sheet and good execution track record

Flexible Workspace: Strong Occupancy & Leasing Traction

* Demand: Office leasing across India’s top seven cities remained strong in Q4FY26 at 18.3 msf, but decreased 11% QoQ at an all - time high base. Simultaneously, it increased 15% YoY, driven by demand from Tech, BFSI and GCC. Bengaluru (+18% YoY to 5.3 msf) and Hyderabad (+100% YoY to 3.4 msf) together accounted for ~8.7 msf (~45–50% share). Notably, Mumbai, too, saw 23% YoY rise to 2.7 msf and Pune more than doubled its annual growth, reaching 2.5 msf

* Supply: Office stock supply in Q4FY26 rose by 19% YoY, totalling 11.8 msf. Bengaluru led supply additions with a 47% share, followed by Delhi-NCR at 17%. Chennai and Mumbai also saw notable completions, each contributing about 1.5 msf this quarter

* Occupancy Level: With demand outpacing supply, vacancy level across the top seven cities declined by nearly 90 bps YoY to 15.3% at the end of Q4FY26

* Rentals: Average office rentals across the top seven cities witnessed an uptick of around 6% YoY (roughly INR 90–92 psf), reflecting sustained demand for Grade A office spaces

* Flexible Workspace: Gained further traction, contributing ~3.9 msf (~21% of total leasing, up from ~14% YoY), highlighting rising enterprise adoption. Demand continued to strengthen, with leasing by flex operators rising ~77% YoY, supported by scalability needs of enterprises and GCCs

* SMARTWOR is our top investment idea, the rationale being strong demand, healthy occupancy rate of 90% in mature centres, wellmanaged top line, and massive expansion YoY by employing the lowest capex cost in the industry

Our Coverage Universe

Developers

Q4FY26E Preview: Companies under our coverage (3) are expected to report pre-sales (INR Mn) growth of 9.8/(6.6)% QoQ/YoY.

Collections (INR Mn) are expected to grow by 51.3/9.3% QoQ/YoY. Watch out for: Company-specific updates related to progress on launch schedule, business development and absorption of launches.

Stance: We retain a ‘Positive’ stance on developers, underpinned by sustained demand for branded and premium residential developments and strong launch pipelines across key urban markets. Within that, growth trends could be different for individual companies depending upon their presence in the market segments (Luxury, Premium and Affordable) with BUY on 3/3 stocks.

Flexible Workspace

Q4FY26E Preview: Companies under our coverage (3) are expected to report revenue growth of 8.4/33.9% QoQ/YoY with EBITDA margin of 50.3% (vs. 49.6% and 50.3% in Q3FY26 and Q4FY25, respectively). EBITDA growth is anticipated to be 10.0/33.8% QoQ/YoY, while PAT is expected to increase by 7.6/80.8% QoQ/YoY (YoY growth mainly supported by profit after tax for SMARTWOR in Q4FY26E vs losses after tax in Q4FY25).

Watch out for: Progress on annual seat addition targets, average rentals and occupancy. Also, company-specific updates on order inflow for the D&B segment and furniture manufacturing vertical.

Stance: We retain a ‘Positive’ stance on flexible workspace, supported by increasing adoption of asset-light and flexible leasing models and strong enterprise-led demand. Our optimism is facilitated by the growth of GCCs, IT services and the expanding domestic start-up ecosystem. We have a Buy Rating on 3/3 stocks

Construction

Q4FY26E Preview: For PSPPL, the quarter is expected to witness healthy revenue growth along with margin expansion, owing to improved execution of its order book. It is expected to respectively report Revenue/EBITDA growth of 5.3/27.1% and 27.1/114.2% QoQ and YoY. EBITDA margin is expected to come in at 8.1% (+139/329 bps QoQ/YoY, respectively).

Watch out for : Order execution, growth in orderbook and guidance on EBITDA margin.

Stance: We retain a ‘Reduce’ stance on PSPPL.

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