“The implementation of the new Labour Codes had a limited financial impact in Q3 FY26, largely appearing as one-time accounting adjustments rather than recurring cost increases,” said Akshay Shetty, research analyst, Mirae Asset ShareKhan.
Performance was supported by sustained pre-sales momentum and steady project execution, enabling revenue recognition. Vijay Agrawal, managing director and sector lead – infrastructure at Equirus Capital, said larger developers continued to show resilient operating performance backed by strong brands and diversified portfolios.
The Centre implemented four Labour Codes, including the Code on Wages, 2019, from November 21, 2025, consolidating 29 labour laws. A key change mandates provident fund and gratuity contributions on at least 50 per cent of total salary under a uniform definition of “wages”.
Agrawal noted that companies earlier defined basic salary between 30 and 50 per cent of total pay. Where it was already 50 per cent, there is no impact, making the cost-effectiveness gradual rather than disruptive.
DLF, India’s largest listed real estate entity, noted that it continues to monitor the finalisation of central/state rules and clarifications from the government on other aspects of the Labour Codes and would provide appropriate accounting effects as and when such clarifications are issued/rules are notified.
DLF reported an incremental impact of Rs 60.15 crore as an exceptional item. Godrej Properties recognised an additional employee benefit liability of Rs 34.50 crore and an expense of Rs 21.08 crore (net of capitalisation), also as exceptional. Oberoi Realty recorded an additional obligation of Rs 23.06 crore based on actuarial valuation. Lodha Developers and Prestige Estates Projects said the impact was not material.
For large developers, earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins remained stable. Incremental costs were absorbed through efficiencies or disclosed as exceptional items. Margin movement was driven more by project mix, particularly premium and luxury segments, than by regulatory changes.
Analysts said there was no visible pass-through of labour-code costs to homebuyers. Developers avoided sharp price hikes, especially in competitive markets. Agrawal said the impact is minimal and can be absorbed by developers. Shetty added that pricing remains driven by demand, location and project quality.
Over the next two to three quarters, the impact of the Labour Codes on costs and Ebitda margins is expected to remain limited, with profitability driven mainly by launches, sales momentum and project mix.
On earnings, Aniket Dani, director, Crisil Intelligence, said Q3 FY26 reflected a sequential recovery but continued year-on-year pressure on profitability. “Revenue showed a mild uptick driven by sustained demand, while remaining marginally lower than the elevated levels seen a year ago. Operating profit strengthened meaningfully compared with Q2 FY26 as construction activity normalised post-monsoon and cost absorption improved,” Dani added.
DLF reported a 13.6 per cent YoY rise in consolidated net profit to Rs 1,203.36 crore, though new sales bookings fell sharply to Rs 419 crore due to no launches.
Lodha Developers’ profit rose 1.32 per cent YoY to Rs 956.9 crore, with pre-sales up 25 per cent to Rs 5,620 crore. Oberoi Realty’s profit grew 0.68 per cent to Rs 622.64 crore, while bookings fell 56.4 per cent YoY to Rs 836.35 crore.
Prestige Estates’ profit surged to Rs 222.6 crore from Rs 17.7 crore, with sales up 39 per cent to Rs 4,183.6 crore. Godrej Properties’ profit rose about 20 per cent to Rs 195.16 crore, with pre-sales up 55 per cent to Rs 8,421 crore.
On a YoY basis, earnings remained stable, though margin expansion moderated amid cost pressures. Sequential performance was mixed due to project timing and deferred launches, but collections stayed strong, and balance sheets improved.
Shetty said most leading branded developers achieved over 70 per cent of FY26 pre-sales guidance in nine months. Fresh launches drove bookings, while delayed launches saw moderation, with recovery expected in Q4. Rental portfolios remained stable, with office and retail occupancies above 90 per cent.
Construction costs did not see a meaningful escalation during the quarter but higher statutory contributions and compliance needs led to marginally higher execution expenses, analysts noted.
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