International brokerage Jefferies has revised its outlook for the Indian real estate sector for FY27, predicting a significant moderation in growth. While the sector saw a robust 21% pre-sales growth in FY26, that figure is expected to drop to approximately 6% in FY27 as macro headwinds and geopolitical tensions in West Asia delay high-value luxury purchases.
Key Takeaways: Sector at a Glance
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The “Slowdown” Factor: Slower decision-making in the luxury segment is the primary drag.
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Macro Headwinds: Jefferies anticipates a 50 basis point rise in interest rates and a 2% increase in construction costs.
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Valuation Correction: Realty stocks are down roughly 20% YTD and nearly 40% from their 2024 peaks, which the brokerage suggests has already priced in most of the downside.
Jefferies Ratings & Price Targets
| Company | New Rating | New PT (Rs) | Old PT (Rs) | Key Reason for Revision |
| DLF | Buy | 800 | 900 | 11% cut in FY27 pre-sales estimate. |
| Godrej Properties | Buy | 2,420 | 2,700 | Resilient due to strong project pipeline. |
| Lodha | Buy | 1,215 | 1,475 | Slowdown concentrated in South/West Mumbai. |
| Prestige Estates | Buy | 1,635 | 1,850 | Pressure from high base and large Capex. |
| Oberoi Realty | Hold | 1,680 | 1,700 | Delays in high-value purchase decisions. |
Detailed Stock Analysis
DLF: Maintaining the Lead
Despite cutting the price target, Jefferies still prefers DLF. The firm’s pre-sales estimate for FY27 was trimmed to ₹20,000 crore. While luxury home sales are seeing “slower decision-making,” DLF is supported by a strong retail expansion in the NCR market and a steady launch pipeline.
Godrej Properties: The Resilient Choice
Godrej remains a top pick due to its flexibility. With a projected ROE exceeding 20% by FY28, the company has the option to shift its product mix toward ticket sizes that are currently seeing higher demand, offsetting the luxury cooling.
Lodha (Macrotech Developers): Mumbai Pressure
The slowdown for Lodha is expected to hit large-ticket segments in South and Western Mumbai. However, expansion into NCR and data center land monetization are expected to act as growth cushions.
Prestige Estates & Oberoi Realty
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Prestige: Faces a “high base” challenge. Jefferies cut FY27 pre-sales estimates by 9%, noting that a large ongoing capital expenditure program continues to pressure free cash flows.
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Oberoi: Projected to see growth from a low base, but the heavy reliance on high-value transactions makes it vulnerable to the current “wait-and-watch” sentiment among premium buyers.
The “Silver Lining”
Jefferies notes that valuations are now below pre-COVID levels. With strong cash flows and low debt across the major players, the brokerage believes market share gains by these organized developers will limit any further sharp declines in stock prices.
