Amid the ongoing crisis across West Asia, international brokerage firm Jefferies predicted that India’s real estate sector may see a moderation in growth in FY27. According to the brokerage firm, pre-sales growth is expected to slow to about 6% in FY27 from 21% in FY26, as demand for high-value homes gets delayed.
Jefferies on India Realty: FY27 Outlook
Pre-sales growth to slow to ~6% in FY27 from 21% in FY26 amid macro headwinds
~6% FY27 Pre-Sales Growth (est.)
-20% Realty Stocks YTD
-40% From 2024 Peak
+50 bps Interest Rate Rise (est.)
Jefferies Ratings and Price Targets
| Company | Jefferies Rating | New PT (Rs) | Old PT (Rs) |
|---|---|---|---|
| DLF | Buy | 800 | 900 |
| Lodha | Buy | 1,215 | 1,475 |
| Godrej Properties | Buy | 2,420 | 2,700 |
| Prestige Estates | Buy | 1,635 | 1,850 |
| Oberoi Realty | Hold | 1,680 | 1,700 |
Valuations are now below pre-COVID levels. Strong cash flows, low debt, and market share gains should limit further declines, even as premium housing demand faces near-term pressure.
Real(i)ty check
The firm further mentioned that the June quarter could see a noticeable slowdown with pricing growth of around 5%, a 2% increase in construction costs, and a 50 basis point rise in interest rates and capitalisation rates.
Even with these challenges, the brokerage says the recent sharp fall in real estate stocks, down about 20% this year and nearly 40% from the 2024 peak, has already priced in most of the downside. Valuations are now below pre-Covid levels, and strong cash flows, low debt, and market share gains should limit further declines, the report said.
Jefferies on DLF
Jefferies continues to prefer DLF, although it has trimmed its estimates to reflect slower decision-making in the luxury housing segment. The brokerage has cut its FY27 pre-sales estimate by about 11% to Rs 20,000 crore, with sales likely to remain at the lower end of the company’s guided range.
The moderation is largely linked to delays in closing high-value transactions, which tend to be more sensitive to macro uncertainty. Even so, DLF’s broader business remains supported by a steady launch pipeline and improving lease income, particularly driven by retail expansion in the NCR market.
Jefferies has reduced its price target to Rs 800 from Rs 900 earlier, implying a discount of around 17% to its one-year forward net asset value. The brokerage maintains a ‘Buy’ rating, supported by strong cash generation and a visible development pipeline.
Jefferies on Lodha
Lodha remains another preferred pick, with the brokerage expecting the company to deliver steady growth despite some near-term moderation in demand. Jefferies has lowered its FY27 pre-sales estimate by around 6% to Rs 23,500 crore, although this still implies a 15% year-on-year increase.
The report further mentioned that the expected slowdown is concentrated in large-ticket housing segments, particularly in South and Western Mumbai. The brokerage further added that growth will be supported by factors like monetising data centre land, expanding into markets like NCR, and a strong pipeline of new projects added in FY26.
Jefferies on Godrej Properties
According to the brokerage firm, Godrej Properties remains resilient because of its strong business development pipeline and flexibility in product mix. Jefferies estimates FY27 pre-sales at around Rs 37,500 crore, which is a 12% year-on-year growth, with only a 4% cut to its earlier estimates.
The brokerage notes that the company’s significant business development in FY26 provides optionality to shift towards higher-demand ticket sizes, which could help offset some of the broader slowdown. Godrej Properties is also expected to maintain strong return ratios, with a projected return on equity exceeding 20% by FY28.
Jefferies has lowered its price target to Rs 2,420 from Rs 2,700 earlier, factoring in slower price growth and a marginal reduction in earnings estimates, while maintaining a ‘Buy’ rating.
Jefferies on Prestige Estates and Oberoi Realty
Among other developers, Prestige Estates is seen facing pressure due to a high base and potential delays in launches, particularly in NCR and the Mumbai Metropolitan Region, according to the report. Jefferies has cut its FY27 pre-sales estimate by around 9% to Rs 275 billion, implying a year-on-year decline of about 9%.
The brokerage also points to continued pressure on free cash flows due to a large ongoing capital expenditure programme, although valuations remain below historical averages.
Oberoi Realty, on the other hand, could see growth from a relatively low base, with pre-sales projected to rise to Rs 6,500 crore in FY27, up about 28% year-on-year. However, Jefferies has still trimmed its estimates by roughly 13% to account for delays in high-value purchase decisions, which are critical for its project pipeline.
The brokerage maintains a more cautious stance here, retaining a ‘Hold’ rating with a price target of Rs 1,680. This implies 7.7% upside from current levels.
Realty sector outlook
On other stocks, Jefferies has retained a ‘Hold’ rating on Sobha with a revised price target of Rs 1,385, implying an upside of 12.7%. The firm further reiterated a ‘Buy’ on Mindspace Business Parks REIT wth a target of Rs 527, implying an upside of 7.3%, while Embassy Office Parks REIT got a ‘Buy’ rating with a target of Rs 480, implying a 9.1% upside. Jefferies further gave a ‘Buy’ rating to Brookfield India Real Estate Trust with a target of Rs 363, implying an 11.3% upside.
Jefferies’ latest outlook suggests that slower decision-making in premium housing, modest cost inflation and higher interest rates are expected to weigh on momentum in FY27.
Disclaimer: The analysis provided above is based on a third-party brokerage report and is for informational purposes only. It includes specific stock ratings, price targets, and sector forecasts that should not be construed as an offer or solicitation to buy or sell any securities. Given the inherent volatility of real estate investments and market-moving predictions, readers are strongly advised to consult with a SEBI-registered investment advisor before making any financial decisions.
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