Real estate sector pre-sales numbers are expected to remain on track in Q1FY27 to achieve annual targets for FY27, according to a report by Ambit Capital. The brokerage noted that sustenance sales and responses are driving this performance across most developers. However, top developers like Oberoi Realty, Aditya Birla Real Estate (ABREL), and DLF did not launch projects this quarter, which has increased expectations from these companies for the rest of FY27. As reported by Ambit Capital, the sectoral outlook remains healthy as older projects continue to accrue sales.
Ambit Capital continues to prefer developers with sizable commercial real estate presence or attractive pricing to limit downside risks. Among large-cap players, the brokerage prefers Prestige Estates and Lodha. In the mid-cap segment, the preferred pick is Aditya Birla Realty (ABREL) despite the developer's absence of launches this quarter. The brokerage maintains ABREL as its top pick, citing the company's GDV pipeline of around ₹70,000 crore that implies high growth potential in the real estate sector.
Prestige Estates is expected to witness steady cash flows amid a potential residential downturn. The brokerage's target price of ₹2,125 (cut from the earlier ₹2,075) implies an upside of 25 per cent from the stock's current price. The company's pre-sales are expected to touch ₹7,500 crore on the back of new project launches and sustenance sales. As reported by Ambit Capital, Prestige's continued business expansion is likely to drive upside, but timely launches will be key in meeting pre-sales expectations.
Grade-A office developers' performance will be driven by factors such as SEZ denotification, GCC-led demand, and improved leasing outlook. These factors are likely to drive market-to-market spreads and higher occupancy levels in the medium term for developers, according to analysts at Ambit Capital. The brokerage expects flex operators to continue growing at 4-5 per cent Q-o-Q or 30 per cent Y-o-Y. Among such companies, the brokerage marked its preference as WeWork India = Smartworks > IndiQube > Awfis.
