India's residential real estate sector is entering the 2026-27 financial year (FY27) on a firm footing, though analysts expect the vertical growth seen over the last four years may not repeat this time. According to Emkay Global Financial Services, the real estate market is transitioning into a more mature phase of the housing cycle, with growth becoming more selective and driven by execution strength rather than broad-based demand expansion. The brokerage noted that pre-sales growth for 18 listed developers slowed to 17% in FY26 from 20% in FY25, 39% in FY24, and 43% in FY23, now expecting FY27 pre-sales growth to further moderate to 10-15%. Despite concerns over slower sector growth, analysts expect the first quarter (Q1) of FY27 to begin on a healthy footing, supported by a strong launch pipeline.
All stocks in the Nifty Realty index have declined so far in calendar year 2026, with individual performers showing significant underperformance. As reported by Business Standard, Brigade Enterprises, Aditya Birla Real Estate, Lodha Developers, DLF, Prestige Estate, and Godrej Properties have underperformed the market by falling in the range of 14.5% to 25.4%. By comparison, the Nifty50 index and the Nifty Realty index have dropped 10.5% and 12.5% respectively year-to-date. The weakness extends to broader markets, with the BSE 150 Midcap index falling 1.25% and the BSE 250 Smallcap index losing 0.61% amid profit booking across segments. However, the Nifty Realty index outperformed the Nifty, gaining 16.5 percent compared to the latter index's 3.9 percent gain so far this financial year.
Channel checks by global brokerage Nomura suggest Q1FY27 will likely witness a resilient start, led by a relatively stronger launch line-up from Godrej Properties, Oberoi Realty and Sobha. According to Nomura, three super-luxury launches in NCR -- Oberoi Realty's 360 North, Godrej Properties' Samaris, and Sobha's Crescent project -- are expected to emerge as key demand drivers for the quarter. The brokerage expects Godrej Properties' Samaris project in Gurgaon and Sobha's Crescent development to remain resilient despite premium pricing. It also remains confident about Prestige Estates' Golden Grove project in Hyderabad, and Sobha's One World township project in Bengaluru. Emkay Global expects Mahindra Lifespace's Rainforest project near Mumbai's Kanjurmarg to generate bookings of ₹900-1,000 crore in Q1FY27, while noting strong traction for Prestige Estates' recently launched Golden Grove project in Hyderabad.
Virat Jagad, technical analyst at Bonanza, believes that DLF, Sobha and Lodha are precariously placed on the charts, wherein a breach of key supports could make them vulnerable to further downside. DLF is currently trading at ₹575 and needs to sustain above ₹610-₹650 range for meaningful technical improvement, with a breakout above channel resistance potentially triggering a stronger move towards 700-750 levels. Lodha is trading at ₹878 and requires a decisive breakout above ₹900-₹950 to revive bullish sentiment. Sobha is displaying a weak-to-neutral technical setup at ₹1,368, trading below 100-day and 200-day EMAs with repeated inability to sustain above ₹1,420-₹1,450, indicating persistent supply at higher levels. The stock faces potential downside if it breaks below ₹1,360, targeting ₹1,300-₹1,280 levels, while a convincing reclaim above ₹1,420 could target ₹1,500 levels.
With growth becoming more selective, brokerages recommend focusing on developers with strong project pipelines, execution capabilities and healthy balance sheets. Emkay's preferred picks are Mahindra Lifespace Developers, Sobha and Lodha Developers, with the brokerage expecting Mahindra Lifespace and Sobha to emerge as key outperformers, supported by robust launch pipelines and medium-term pre-sales CAGR of about 20-25% over the next 3-4 years. Lodha remains its preferred large-cap developer due to its disciplined execution and calibrated growth strategy, with expectations of delivering around 17% pre-sales growth in FY27 and sustaining 10-15% CAGR over the next 4-5 years. Nomura prefers Lodha Developers, Oberoi Realty, DLF, Prestige Estates and Aditya Birla Real Estate, with all stocks rated as 'Buy' except Godrej Properties, which has a 'Neutral' rating.
