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Starting on a strong note

Residential developers under coverage will have a record 1QFY26 with pre-sales in excess of Rs400 bn, beating the previous peak of Rs342 bn in 3QFY25. DLF and Prestige will lead from the front with pre-sales in excess of Rs100 bn on the back of strong launch activity during the quarter, ably backed by Godrej Properties and Lodha, which will likely sustain their strong growth momentum. Our coverage universe is targeting ~20% yoy increase in cumulative pre-sales to Rs1.4 tn for 2026E, on the back of Rs1.7 tn of launches, with several marquee launches already contributing to sales numbers during the quarter. Street concerns about the state of the cycle may be valid; however, our listed universe continues to deliver industry-leading pre-sales growth while trading at reasonable valuations. DLF, Prestige, Lodha and Brigade remain our preferred plays on residential real estate.

Coverage universe looking at 50% yoy pre-sales growth in 1QFY26

Residential real estate players have started FY2026 on a strong note with a few big-bang launches—DLF clocking Rs110 bn of pre-sales at the Privana launch in Gurgaon, Prestige with Rs65-70 bn of pre-sales at the NCR launch and Rs8 bn at the Bengaluru launch, Oberoi with Rs10 bn at the new phase launch at Elysian, Godrej with Rs20 bn at the project launch in Bengaluru, and Sobha marking a strong debut in Greater Noida. Accordingly, we expect our coverage players to deliver their best-ever quarterly pre-sales of Rs447 bn (+50% yoy), with growth being led by Prestige, DLF, Brigade and Oberoi. We highlight that players like Prestige and DLF will likely meet close to 50% of their full-year guidance in 1QFY26 itself.

Strong launch pipeline for the year; 20% targeted pre-sales growth for coverage

We highlight that our coverage players are targeting 20% yoy growth in cumulative pre-sales to Rs1.4 tn, with growth led by Prestige, Sobha, Sunteck, Lodha and Signature. The strong growth guidance is backed by Rs1.7 tn of planned launches for the year, which are well spread out, with 1QFY26 seeing its fair share of activity. We note that Prestige and Godrej have the largest launch pipeline of ~Rs400 bn each, followed by Lodha, DLF and Signature with Rs170-190 bn each, and Sobha and Brigade with Rs120-130 bn each of planned launches.

Further legs to the upcycle; sensible players continue to gain market share

A strong response to new launches and continuing momentum in the liquidation of existing inventory will likely help our coverage universe to deliver industry-beating sales growth. Our coverage universe continues to benefit from market share gains in home markets, as well as healthy responses to launches in new markets. Street concerns about where we stand in the cycle may be valid, noting the strong price appreciation across key markets. However, branded players continue to garner market share as well as increase their presence in new micro markets to keep the growth engine going, while valuations remain attractive at 8-11X adjusted EV/EBITDA.

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