Results preview: High base may weigh on developers' Q1 pre-sales

Developers have become selective in launching new projects: Analysts

Top Indian listed real estate developers are expected to report mixed operational performance for the first quarter of 2026-27 (Q1FY27) mainly due to the timing of new project launches, even as the demand for premium housing and branded developers remains resilient. 

Analysts estimate that developers who launched new projects during the quarter are likely to report healthy growth in pre-sales. However, companies that relied mostly on sustenance sales may see weaker year-on-year (Y-o-Y) numbers, amid a high base in Q1FY26. 

Brokerages expect the June quarter to remain seasonally soft­er, as developers typically moderate laun­ches during the period. Delayed project approvals, geopolitical uncertainty and a calibrated approach to new supply are also expected to have influenced performance during the quarter. 

“While the overall volume trend has been flat/marginally negative for a few quarters now, our recent analysis indicates resilient demand in premium housing. Demand (in Q1FY27) was impacted by negative sentiment, led by war, inflation and the risk of interest rate hikes, and hence, supply wasn’t broad-based,” JM Financial noted. 

The brokerage expects its real estate coverage universe to report cumulative bookings of ₹19,600 crore, down 32 per cent Y-o-Y and 29 per cent quarter-on-quarter (Q-o-Q), due to a high base and selective launches by a handful of developers. 

However, analysts at PL Capital said, “Our channel checks indicate strong response across these new launches, underscoring healthy absorption and expression of interest (EoI) conversions in well-located projects, alongside continued pricing power in premium micro-markets.” Analysts at Nomura also noted that this quarter did not see “any major” war-related impact on sustenance sales from inventory across players, implying resilient footfalls and consequent conversions. 

According to Anarock, uncertainty amid the West Asia war and its inevitable supply chain disruptions impacted overall housing sales in the top seven cities in Q1 FY27, with residential sales dropping 6 per cent Y-o-Y and 11 per cent Q-o-Q. 

Analysts said developers have become increasingly selective in launching new projects after several years of aggressive expansion. 

Nomura expects only Godrej Properties to report meaningful Y-o-Y growth in pre-sales, while Lodha Developers is likely to post about 3.37 per cent growth. DLF, Prestige Estates, and Oberoi Realty are projected to report lower pre-sales due to fewer or no launches and a high base effect. Godrej’s performance will be supported by launches in Gurugram, Noida, Bengaluru, and Hyderabad. The top two listed developers of India — DLF and Lodha — did not launch any new projects during Q1FY27. With no new laun­ches and a high base from Q1 FY26, DLF’s pre-sales will be largely driven by the super luxury project Dahlias. 

According to JM Financial, Lodha’s bookings will be driven by sustenance sales across projects, including recent launches in South Central Mumbai. Nomura pointed to Lodha’s management saying that sales till mid-May were impacted due to the West Asia war. 

Oberoi launched two smaller projects in Mumbai’s Bandra and Malabar Hill, with a cumulative gross development value (GDV) of ₹500 crore, JM Financial noted. The company is also expected to see lower pre-sales, despite healthy sustenance sales, amid a high base from Q1FY26. Bengaluru-based Prestige’s pre-sales will be driven by two new launches across Hyderabad and Bengaluru, with a combined launch GDV of ₹6,900 crore. 

Anuj Puri, chairman of Anarock Group, said that developers with meaningful exposure to NRI and buyers from West Asia could report some softness, as geopolitical tensions made that investor base more cautious during the quarter.

 

On profitability, views remain mixed. Puri stated that listed developers have faced real cost pressure from the West Asia crisis, with steel prices up around 20 per cent and construction costs estimated to rise as much as 5 per cent if tensions persist. “Cost pass-through among listed players has stayed partial, since price hikes taken so far cover only part of the cost increase, so margin compression is more likely than a full transfer of costs to homebuyers this quarter,” he added. 

Equirus Securities expects earnings for top listed developers to remain healthy. “Margins are likely to stay range-bound to modestly improving, aided by a favourable project mix and continued deleveraging, though input cost pressures amid geopolitical disruptions could pose some near-term risk to construction pace and delivery timelines,” said Jainam Shah, analyst – equity research at Equirus Securities. “Developers with a larger annuity/rental income base are likely to see relatively steadier earnings, providing an added cushion to residential recognition,” he added. 

Despite the softer quarter, analysts remain constructive on the sector, citing healthy demand for premium housing, disciplined supply and a strong launch pipeline over the rest of FY27. 

Brokerages also noted that several projects received regulatory approvals only towards the end of the June quarter and are likely to be launched in the second and third quarters of FY27, providing better visibility for the remainder of the year. 

PL Capital noted that it maintains a constructive stance on developers with strong launch pipelines, balance sheet discipline, and an execution track record. “Preference remains for players with Bengaluru/Mumbai exposure, premium positioning, and near-term launch visibility, which are best placed to sustain pre-sales growth into FY27E,” the brokerage noted.