Puravankara, Sobha, Brigade, DLF soar up to 10%; What's driving the rally?

At 01:18 PM; Nifty Realty index, led by Puravankara and Sobha, was up 2.2 per cent, as compared to a 0.7 per cent rise in the Nifty50.

Share price movement of real estate companies today: Shares of listed real estate companies have rallied by up to 10 per cent on the bourses in Thursday’s intra-day trade. 

 

Sobha, Prestige Estate Projects, Brigade Enterprises, Godrej Properties, DLF, Oberoi Realty and Macrotech Developers (Lodha) were up in the range of 2 per cent to 7 per cent on the National Stock Exchange (NSE) in intra-day trade.

 

At 01:18 PM, the Nifty Realty index, the top gainer among sectoral indices, was up 2.2 per cent, as compared to a 0.7 per cent rise in the Nifty 50. In the first four trading days of June, the realty index rallied 5 per cent, as against a less than 1 per cent rise in the benchmark index. In the last 20 trading days, the Nifty Realty index has appreciated by 21 per cent.

 

 

Among the non-index stocks, Puravankara has locked in a 10 per cent upper circuit at ₹306.90 on the NSE. In the past three trading days, the stock price real estate developer has surged 26 per cent. With over 13.5 million square feet (sq. ft.) in the pipeline group-wide and key approvals in place, the management of the company is optimistic about delivering long-term value to all stakeholders.

 

Puravankara announced a strategic joint venture with KVN Property Holdings LLP to develop a 24.59-acre land parcel in North Bengaluru’s KIADB Hardware Park. With an estimated gross development value (GDV) of over ₹3,300 crore and a saleable area of 3.48 million square feet, the project further strengthens the Group’s launch pipeline and regional dominance, the management said. 

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RBI MPC begins meet amid hopes of rate cut 

The Reserve Bank of India (RBI) rate-setting panel Monetary Policy Committee (MPC), started deliberations on the next bi-monthly monetary policy on June 4. The decision of the MPC, headed by Reserve Bank Governor Sanjay Malhotra, will be announced on Friday, June 6, 2025. 

 

The central bank reduced the key interest rate (repo) by 25 basis points (bps) each in February and April, bringing it to 6 per cent.

 

India's central bank is widely expected to deliver a third consecutive rate cut on Friday as muted inflation provides ample space to focus on boosting economic growth further, according to reports.

 

"The RBI is expected to cut the repo rate by 25 basis points to 5.75 per cent to support economic growth while keeping inflation in check. It may maintain its accommodative stance, and a potential downward revision in inflation forecasts could raise expectations of further rate cuts. With inflation remaining below the 4 per cent target, the central bank is likely to prioritise growth, making a rate cut a strong possibility,” said Suresh Darak, Founder, Bondbazaar. 

Kotak Institutional Equities' view on Real Estate sector

Residential real estate closed FY2025 with 1 billion sq. ft. of sales, down 3 per cent year-on-year (Y-o-Y), largely impacted by Hyderabad, which saw a 33 per cent (Y-o-Y) decline. 

 

The MMR (Mumbai Metropolitan Region) and Bengaluru were soft on volumes on account of slower launches, while the NCR (National Capital Region) continued its strong showing, with 47 per cent Y-o-Y growth in volume sales. Price trends remained strong across markets, aiding 10 per cent Y-o-Y growth in sales value.

 

“Valuations for most residential real estate stocks stand at 7-10x adjusted EV/ Ebitda (FY2026E) post some recovery in the stock prices. H2FY25 saw an improvement in sales following a weaker H1FY25; developers expect the momentum to continue. They have guided for double-digit pre-sales growth (20 per cent Y-o-Y in FY2026E for our coverage), aided by industry growth and market share gains,” Kotak Institutional Equities said in a sector report.

 

The combined launch pipeline at 140 million sq. ft (+30 per cent Y-o-Y) has a potential GDV of ₹1.7 trillion, which should also support the momentum. Net debt for the listed developers has come off significantly over the past few years, aided by healthy cash generation as well as equity raises. Strong balance sheets would allow the companies to invest in new land parcels, aiding future growth. The brokerage firm said they remain constructive and prefer DLF, Brigade and Prestige at the current price points.