India's Real Estate Market Poised for 10-15% Sales Growth in Q4: Jefferies Report

India's real estate market is poised for a robust closing of the financial year, with the fourth quarter (Q4) primarily expected to be a 'launch-driven quarter' led by new project launches, as highlighted in a recent report by Jefferies. This positive outlook is bolstered by strong sales velocity in the top seven cities during January-February, indicating a strong demand momentum.

The report points out that sales volumes in the residential segment in February are expected to achieve record highs. Jefferies estimates that listed real estate companies could report 10-15% sales growth in Q4, supported by strong demand and an active pipeline of new launches. Looking ahead, the sector’s overall sales growth for FY26 could exceed 20%, driven by:

- Continued demand in residential housing - Increased supply through new project launches - Strong traction in premium and mid-income segments

The brokerage identified new project launches and sustained end-user demand as the primary growth drivers for the sector in the near to medium term. However, Jefferies also noted that global uncertainty and geopolitical risks, such as the Iran conflict, may influence investors' sentiments. As a result, developers may take a more conservative approach to their FY27 guidance.

On valuations, the report noted that the sector is currently trading near its long-term average at relatively lower levels, making it attractive for investors. Several listed real estate companies are trading at price-to-earnings (PE) multiples below 20x, which is considered reasonable given the growth outlook.

Real estate stocks closed on a strong note in Wednesday’s trading session, with several key players witnessing gains amid positive developments and expansion announcements across the sector. Among the top performers, The Phoenix Mills Ltd surged 4.14% to close at Rs 1,565.85, while Oberoi Realty Ltd rose 3.80% to Rs 1,498.80. Puravankara Ltd emerged as the biggest gainer, climbing 5.25% to Rs 181.40. DLF Ltd also advanced 2.52% to Rs 534.35. Other stocks that ended in the green included Mahindra Lifespace Developers Ltd, up 2.06% to Rs 334.25, and Godrej Properties Ltd, which gained 1.56% to settle at Rs 1,564.75. Meanwhile, Prestige Estates Projects Ltd rose 1.35% to Rs 1,220.00, and Lodha Developers edged up 0.92% to Rs 733.15.

Puravankara Ltd on March 25 unveiled plans to launch a portfolio of 30 projects over the next 24 months across South India and Mumbai. The planned developments span nearly 51.14 million sq. ft. of developable area, with an estimated Gross Development Value (GDV) exceeding Rs 55,000 crore. The company stated that a significant number of these projects are already in the approval stage, while the remaining are under design, with approvals expected to be initiated soon.

Godrej Properties Ltd announced the acquisition of a nearly 20-acre land parcel near Whitefield in Bengaluru on March 18. The company plans to develop a premium residential project on the site, with an estimated revenue potential of around Rs 1,350 crore. The land parcel is strategically located near NH-648 Main Road, within the Whitefield growth corridor, which is one of the major residential and commercial areas of Bengaluru. The area is also close to the Whitefield-ITPL region, and connectivity is improved due to the presence of metro stations like Kadugodi and Hopefarm on the Purple Line.

Overall, despite the near-term momentum being favourable, it is also dependent on the evolution of global risks in tandem with domestic demand trends.