BSE Realty index hits 10-month low; Oberoi, Prestige, Lodha fall up to 7%

The BSE Realty index was trading at its lowest level since March 26, 2024, and has corrected by 23 per cent from its December 2024 high.

Real estate shares came under pressure as the BSE Realty index hit a 10-month low of 6,719.36, down 5.7 per cent on the BSE in Wednesday’s intraday trade, amid a sharp correction in the market prices of front-line companies.

 

The realty index recorded its lowest level since March 26, 2024, when it touched 6,858.75, according to data. The index has corrected by 24 per cent from its December 2024 high of 8,871.98. Over the past month, the stock prices of Prestige Estates Projects, Oberoi Realty, Macrotech Developers (Lodha), Sobha, and Godrej Properties fell between 21 per cent and 26 per cent.

 

On Wednesday, the BSE Realty index emerged as the biggest loser among sectoral indices, declining 4.5 per cent compared to a 0.75 per cent rise in the BSE Sensex. Over two days, the realty index has dropped 8.6 per cent.

 

Shares of Prestige Estates Projects, Oberoi Realty, Lodha, Sobha, and Godrej Properties fell between 5 per cent and 6 per cent. DLF, Anant Raj Industries, and Brigade Enterprises declined in the range of 3 per cent to 4 per cent. 

 

Among individual stocks, Oberoi Realty fell 7 per cent to Rs 1,731.9 during intraday trade and has plunged 13 per cent over two days. The company reported presales growth of 144 per cent year-on-year (Y-o-Y) to Rs 1,920 crore in the 2024-25 (FY25) October-December quarter (Q3), 13 per cent below estimates, driven by robust bookings at newly launched projects. Lower bookings from existing projects due to price increases affected overall sales, though management expressed confidence in improved sales in the coming quarters. The stock closed 5 per cent lower at Rs 1,764 on the BSE.

 

Oberoi Realty is seeing growth in its residential segment and an uptrend in its rental portfolio, supported by its ongoing marquee office and retail projects. Strong traction at its Pokhran-II launch in Thane is expected to boost its residential pipeline across the Mumbai Metropolitan Region and Gurugram, according to Motilal Oswal Financial Services, which maintained a ‘neutral’ rating on the stock. 

 

Elara Capital noted that the presales miss was partly due to lower-than-expected sales in the Three Sixty West project, where deal closures shifted to the fourth quarter of FY25. Sustenance sales in other projects were also affected by price hikes and the holding back of higher-floor inventory (excluding Mulund). Despite this, Elara Capital reiterated its ‘buy’ rating with a sum-of-the-parts-based target price of Rs 2,350 for March 2025. Key downside risks include project launch delays and regulatory setbacks.

 

Meanwhile, HSBC Global Research highlighted a shift in real estate demand towards mid-income housing. Over the past four years, the market has been driven by ‘upgrade’ demand, enabling developers to achieve better pricing. A preference for highrises has expanded the addressable market for developers.

 

HSBC’s December report indicated that while residential real estate presales volumes and values grew at compound annual growth rates of 18 per cent and 31 per cent, respectively, between 2021 and 2024, the high base is likely to slow growth in 2025. Weak approval cycles could further pressure 2025-26 presales growth, potentially leading to revised guidance in the high-single to low-double digits.

 

Despite these challenges, analysts at Antique Stock Broking expect heightened business development as developers raise capital through qualified institutional placements and maintain lean balance sheets.