Lodha, Godrej Properties, Brigade at 52-week lows; why realty stocks fell?

In the past two weeks, the BSE Realty index has slipped 10 per cent, as against a 2.5 per cent decline in the BSE Sensex.

Share price of real estate companies today

 

Shares of real estate companies were under pressure, with the frontline stocks Lodha Developers, Godrej Properties, Brigade Enterprises and Aditya Birla Real Estate (ABREL) falling to their respective 52-week lows on the BSE in Tuesday’s intra-day trade.

 

Share prices of Oberoi Realty, Prestige Estates Projects (PEPL), Embassy Developments and Sobha were down in the range of 3 per cent to 6 per cent.

 

At 10:40 AM; the BSE Realty index was the top loser among the sectoral indices, down 2.4 per cent, as compared to 0.3 per cent decline in the BSE Sensex. In the past two weeks, the realty index has slipped 10 per cent, as against a 2.5 per cent dip in the benchmark index.

 

Why are realty stocks under pressure?

 

The real estate companies have reported disappointing pre-sales numbers for the third quarter (October to December) of the financial year 2025-26 (Q3FY26). Demand in the real estate sector depends on the overall economic prospects of the country. The sector is also exposed to cyclicality associated with macroeconomic factors such as interest rates and metal prices.

 

Oberoi realty reported weak pre-sales for Q3FY26 at ₹836 crore (down 56 per cent year-on-year (YoY), down 36 per cent quarter-on-quarter (QoQ)) due to high base of Q3FY25 (Jardin project launch contributing ₹1,333 crore). 

 

Mumbai-based premium real estate developer Oberoi Realty’s net profit for Q3FY26 grew marginally by about 0.68 per cent year-on-year (YoY) to ₹622.64 crore. The company’s net profit for Q3FY25 was ₹618.38 crore. The profit in Q3FY26 missed the Bloomberg analysts’ poll estimate of ₹769.50 crore.

 

The company’s revenue from operations during Q3FY26 stood at ₹1,492.64 crore, up 5.77 per cent YoY. Its other income during the quarter surged 40.47 per cent YoY to ₹69.1 crore. The revenue also missed the estimate of ₹1,791.58 crore. EBITDA margins stayed flat QoQ at 57.4 per cent (lower 324 bps YoY) led by residential (200 ppts QoQ decline to 49.8 per cent). 

 

During the quarter, the company did not launch any new projects. Analysts at Antique Stock Broking are expecting the firm to launch one new tower in Sky City Borivali, a project on Peddar Road and another in Gurugram in Q4FY26. If these launches materialise, then Oberoi may surpass pre-sales of ₹6,500–7,000 crore in FY26.

 

Oberoi reported softening pre-sales run-rate during Q3FY26 in the absence of new launches and lower traction from Three Sixty West, Elysian, Enigma, and Sky city projects sequentially. Consequently, collections were lower 30 per cent YoY (down 28 per cent QoQ) at ₹975 crore. Its commercial and retail assets viz. Commerz II and III and Sky City Mall saw improvement in occupancy levels sequentially. Further, revenue booking and EBITDA margins broadly stayed in-line, ICICI Securities said in a note.

 

Meanwhile, according to analysts at Ambit Capital, amongst different price points, luxury units (>₹ 5 crore/unit) are seeing highest inventory build-up, especially in MMR (Mumbai Metropolitan Region) and NCR (National Capital Region); DLF and ABREL’s luxury launches can witness some delays. 

 

Commercial leasing grew 25 per cent YoY (in Tier-I cities) in CY25. Hence, material commercial pipeline for PEPL and Max Estates should result in value unlocking over next 2 years. Consolidation has been keeping demand momentum healthy though the brokerage firm said they remain watchful of sales velocity with increasing unaffordability and BD costs (as a % of GDV) amid high growth guidance by coverage players.  =============================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.