HSBC Names Godrej Properties, DLF, Sobha as Top Real Estate Stocks for FY26
HSBC has identified Godrej Properties, DLF, and Sobha as the top real estate stocks for FY26, citing expected robust growth, strong financial fundamentals, and a positive macroeconomic environment.
Real EstateStock PicksHsbcDlfGodrej PropertiesReal Estate NewsJun 11, 2025
In its recent sector note, HSBC highlighted that the real estate market is poised for steady growth in the coming fiscal year. This growth is supported by healthy levels of unsold inventory, manageable leverage, and robust free cash flow (FCF) momentum. The brokerage has maintained a ‘Buy’ rating on all three stocks, while assigning a ‘Hold’ on Oberoi Realty, citing limited near-term catalysts.
The bullish stance comes amid renewed investor interest in the real estate sector, which received a significant boost from the Reserve Bank of India’s (RBI) latest policy actions. On June 6, the RBI announced a 50 basis point cut in the repo rate—its third consecutive reduction this year—following earlier cuts in February and April. This move sparked a rally in property stocks, with the Nifty Realty index jumping 4.68 per cent, marking a second straight session of strong gains.
Investor sentiment was further lifted by the RBI’s decision to reduce the Cash Reserve Ratio (CRR) by 100 basis points, a step that will inject approximately Rs.2.5 lakh crore in liquidity into the banking system. The additional liquidity is expected to bring down funding costs for banks and lower borrowing rates for developers and homebuyers, further boosting the real estate market.
Other brokerages are also optimistic about the sector. CLSA (Credit Lyonnais Securities Asia), a leading Hong Kong-based investment and brokerage firm known for its Asia-focused research, identified Sobha, Prestige Estates, Godrej Properties, and Sunteck Realty as key beneficiaries of the current macro environment. These companies are expected to see significant growth due to favorable economic conditions and strong market fundamentals.
Meanwhile, rental-heavy players such as DLF and Phoenix Mills, along with real estate investment trusts (REITs), are expected to benefit from lower debt servicing costs and potential revaluations of leased assets as financing conditions ease. This will enhance their financial health and attract more investors to the sector.
Overall, the real estate sector is poised for a strong fiscal year, driven by supportive policies, improved financial metrics, and heightened investor confidence. Companies like Godrej Properties, DLF, and Sobha are well-positioned to capitalize on these positive trends and deliver strong returns to investors.
Frequently Asked Questions
What are the top real estate stock picks for FY26 according to HSBC?
HSBC has named Godrej Properties, DLF, and Sobha as the top real estate stock picks for FY26.
What factors are driving the growth of the real estate sector in FY26?
The growth of the real estate sector in FY26 is driven by a pickup in new project launches, continued pre-sales momentum, and strong financial fundamentals, supported by healthy levels of unsold inventory and manageable leverage.
How did the RBI's recent policy actions impact the real estate market?
The RBI's recent policy actions, including a 50 basis point cut in the repo rate and a 100 basis point reduction in the Cash Reserve Ratio (CRR), have injected liquidity into the banking system, lowering funding costs and boosting investor sentiment in the real estate market.
Which other brokerages are optimistic about the real estate sector?
Other brokerages like CLSA (Credit Lyonnais Securities Asia) are also optimistic about the real estate sector, identifying Sobha, Prestige Estates, Godrej Properties, and Sunteck Realty as key beneficiaries of the current macro environment.
How will rental-heavy players benefit from the current economic conditions?
Rental-heavy players such as DLF and Phoenix Mills, along with real estate investment trusts (REITs), are expected to benefit from lower debt servicing costs and potential revaluations of leased assets as financing conditions ease.
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