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HDFC Securities Report
According to the brokerage HDFC Securities, real estate channel checks suggest strong traction across the luxury segment, a trend the street was not anticipating given the West Asia-driven wealtheffect concerns flagged earlier in the year.
Recent key launches by Prestige Estates, Godrej Properties, Oberoi Realty, Sobha, and Mahindra Lifespaces have seen strong expression of interest collections and conversions, a further sign of underlying demand resilience for branded developers, which shall translate into healthy presales bookings during Q1 FY27 highlights the brokerage.
This EOI traction, spanning both southern (Prestige, Sobha, and Godrej Properties) and western (Oberoi, Mahindra Lifespaces) market developers, reinforces the view that the demand slowdown has been more sentiment-driven and geographically/segment-concentrated than a broad-based structural pullback, with visibility into Q2 FY27 presales already looking encouraging ahead of the print.
The West Asia conflict and the subsequent stock market correction impacted the wealth effect negatively and resulted in delayed deal closures; our analysis suggests residential sales across the top seven cities declined ~6% YoY in Q1 FY27, with the softness concentrated in specific cities and segments rather than broad-based.
Recommendations and top picks:
Following the West Asia war resolution, presales recovery has been stronger than our estimate of 3-6months of slowdown. Q1 FY27 new launches saw robust absorption for our coverage universe, with Sobha, Godrej Properties, and Mahindra Lifespaces Ltd. likely to report the highest-ever Q1 presales.
The brokerage prefers mixed use developers with high rental portfolio and stable presales.
Top picks: Prestige Estates, Oberoi Realty, Sobha, and Mahindra Lifespaces.
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