Prestige Estates Leads the Housing Market, but Nuvama Flags Structural Issues
Prestige Estates remains at the center of Nuvama Research’s latest real estate sector update, even as the stock is down 23.42% over the past six months, while delivering a 290.91% return over five years. However, Nuvama Research, in its latest sector note dated March 23, 2026, is not popping champagne.
The brokerage firm warns that the structural problems gnawing at housing demand, crumbling affordability, a stubborn love affair with luxury, and softening volumes have not gone away. Its verdict on housing stocks stays cautious, even as Prestige Estates holds its place as their top pick in the realty space.
Prestige Estates Projects reported standalone revenue from operations of Rs 1,129.4 crore for the December 2025 quarter, with net profit at Rs 45.8 crore, while consolidated net profit for the period stood significantly higher at Rs 244.7 crore, reflecting contributions from subsidiaries and joint ventures. The company also flagged ongoing legal and tax-related matters, including a pending land development dispute involving receivables of around Rs 92.3 crore and an income tax search conducted during FY25, though management expects no material financial impact from these issues at this stage.
India’s housing market pulled off a February comeback. After a gloomy start to calendar year 2026, residential sales by value rose 18% year-on-year last month across the top seven cities, with volumes rising 11% over the same period. New launches by value also climbed 17% year-on-year, Nuvama adds.
Bengaluru is the single most dominant market in February, and the data from Nuvama Research makes that abundantly clear. Sales by value surged 42% year-on-year in the month, the highest among all seven cities tracked. Year-to-date in calendar year 2026, Bengaluru’s demand by value is already up 34% year-on-year, outpacing every other market by a wide margin. Prices in the city rose 17% year-on-year, and average ticket sizes shot up 27% year-on-year in February—a combination of both higher per-square-foot rates and bigger homes being bought. Unsold inventory in Bengaluru stands at 16 months, one of the tighter readings nationally, suggesting supply has not kept pace with demand. New launches by value, however, dipped 1% year-on-year in February and are down 7% year-on-year in the year-to-date period, which means the supply pipeline is not expanding as fast as sales momentum might warrant.
The National Capital Region throws up the most striking contrast in the entire report. New launches by value surge 154% year-on-year in February 2026—by far the sharpest supply jump of any city. Yet demand by value falls 1% year-on-year in the same month. Year-to-date in calendar year 2026, sales by value in the National Capital Region are down 5% year-on-year, even as launches are up 13% year-on-year. That mismatch between surging supply and stagnant demand is a recipe for inventory build-up. Unsold inventory in the National Capital Region currently stands at 16 months. Average prices in the region actually dip 2% year-on-year in February, the only major market to record a price fall, which points to developer pressure on pricing to move inventory. The National Capital Region also holds the highest average ticket size in the country at approximately Rs 3.3 crore per unit in February 2026, which partly explains the demand resistance.
Mumbai Metropolitan Region records a healthy 21% year-on-year rise in sales by value in February 2026, and year-to-date demand is up 14% year-on-year—the third-best performance among top cities. Prices grow 10 to 13% year-on-year, in line with the broader premiumisation trend playing out nationally. The concern, however, is on the supply side. New launches by value fall 28% year-on-year in February and are up only 10% year-on-year in the year-to-date period. Unsold inventory in Mumbai Metropolitan Region sits at 22 months, one of the higher readings nationally, which suggests the market is absorbing older stock rather than replenishing with fresh supply. Nuvama Research notes that the Mumbai Metropolitan Region is among the markets where absorption increases 13 to 21% year-on-year in February, which is a positive read on underlying demand health.
Chennai is the second-best performing market in February 2026 by sales growth, with demand by value up 32% year-on-year. Year-to-date sales by value in Chennai are up 21% year-on-year, the second-highest among all cities. Prices rise 10 to 13% year-on-year, and new launches in Chennai actually grow 18% year-on-year in February—one of only two cities alongside the National Capital Region to post a positive launch number for the month. Unsold inventory in Chennai is at 19 months. Hyderabad posts 20% year-on-year sales growth in February, though year-to-date demand by value is only up 2% year-on-year. The city carries the heaviest inventory burden in the country at 27 months of unsold stock, compared to 26 months in February 2025. New launches in Hyderabad fall 10% year-on-year in February and are down 28% year-on-year in the year-to-date period—a sign that developers are deliberately slowing supply in the face of elevated inventory. Average ticket sizes in Hyderabad are approximately Rs 1.9 to 2.2 crore, and the city sees unit sizes rise 12% year-on-year in February, the highest unit size expansion of any market.
Pune delivers a 13% year-on-year rise in sales by value in February 2026, though year-to-date demand by value is up just 3% year-on-year. The city has the tightest inventory situation in the country at 13 months of unsold stock—a genuinely healthy number. But new launches in Pune crash 46% year-on-year in February, the steepest fall among all cities, and year-to-date supply by value has plunged 39% year-on-year. That is a dramatic pullback by developers and suggests either deliberate supply discipline or project delays. Prices in Pune grow 4% year-on-year in February, the report added. Kolkata is the weakest performer overall. Sales by value grow just 6% year-on-year in February, and year-to-date demand by value is down 7% year-on-year—the only city alongside the National Capital Region in negative territory for the year so far. Prices are flat year-on-year in Kolkata, ticket sizes dip 1% year-on-year, and unit sizes also fall marginally. Unsold inventory in Kolkata stands at 21 months. Nuvama Research’s data paints Kolkata as a market with neither demand momentum nor pricing power at this point in the cycle.
One of the more important arguments in the Nuvama note is the growing disconnect between value and volume growth. Sales by value rises 18% year-on-year in February 2026, but volume growth is only 11% year-on-year. That gap exists because ticket sizes, unit sizes, and per-square-foot prices are all climbing simultaneously. The premiumisation trend, where developers chase higher-value luxury and premium launches over affordable or mid-income housing, keeps average realisations high even as the number of units sold grows modestly or stagnates. Pan-India unsold inventory has now nudged up to 20 months from 19 months in February 2025, reflecting the slow absorption of higher-priced stock. Nuvama Research argues this cycle does not self-correct without a deliberate developer decision to pivot toward mid-income supply and hold the line on pricing.
Nuvama Research’s overall stance on listed real estate stocks remains guarded. The brokerage firm notes that realty stocks have already corrected from their first-half of calendar year 2024 peaks, in line with the softer volume trend. But it believes that correction may not be over, because concerns around pre-sales growth—the key metric developers use to showcase demand—are not resolved. The firm’s preference is for companies that have a sizeable annuity income component, meaning commercial real estate assets like offices and retail malls that generate recurring rental income independent of housing sales cycles. Prestige Estates remains the firm’s top pick in the sector, with its diversified annuity portfolio giving it a relative cushion against the housing volume slowdown.
February’s numbers give India’s housing market a much-needed breather after January’s weak start. Southern cities carry the national momentum on their backs. But the market’s fundamental tension, rising prices and ticket sizes eating into volume growth while inventory quietly builds, is not resolved. Nuvama Research’s February 2026 sector data makes a reasonably clear case that the next leg of a sustainable housing cycle will require developers to make a conscious choice to step back from luxury and rebuild the mid-income supply pipeline. Until that happens, the brokerage firm sees more of the same ahead.
