JM Financial has initiated coverage on five prominent real estate developers, anticipating that the growth momentum witnessed in FY24 will persist into FY25. The domestic brokerage firm has identified DLF, Keystone Realtors, Macrotech Developers, Oberoi Realty, and Sobha Developers as key players poised to capitalize on the ongoing strength in the residential real estate market.
The financial year 2024 marked a record-breaking period for the sector, with pan-India sales surpassing the one billion square feet threshold. This surge in demand has outpaced new launches, leading to a significant reduction in unsold inventory levels, now standing at multi-year lows of just 11 months. As the market continues to thrive, listed entities like Godrej Properties, Prestige Estates, Signature Global, and Brigade Enterprises have all reported robust growth figures, further fueling optimism for the sector’s prospects.
JM Financial’s latest report suggests that the momentum will carry forward into FY25, projecting an 18% market growth, driven by a 12% increase in volume and a 6% escalation in prices. The firm also expects a moderate rise in supply, aligning with the annual absorption rates, thereby maintaining equilibrium in the market. DLF, one of India’s leading real estate developers, delivered a stable performance in FY24, despite operating on a high base. The company reported record-high collections and operating cash flows and is now poised to exceed pre-sales of ₹17,000 crore in FY25. DLF’s strong brand equity, strategic market positioning, and superior execution capabilities position it well to leverage the sector’s upcycle.
A healthy balance sheet, consistently high EBITDA margins, and robust cash flows further enhance its appeal to investors. Macrotech Developers, also known as Lodha, is expected to strengthen its leadership position within the industry. Its robust sales network, coupled with a diverse portfolio spanning premium, mid-income, and affordable housing segments, positions it favorably to benefit from the ongoing residential market tailwinds. Additionally, the company’s expansion into logistics parks, commercial spaces, and retail as part of its mixed-use developments underpins its strategy to cement its position as a top-tier developer across various product categories.
Oberoi Realty has maintained strong operational performance over the past four years, driven by a series of successful launches and a buoyant property market. With significant projects nearing completion and new launches on the horizon in key locations such as Pokhran Road, NCR, and Worli, the company’s pre-sales are expected to gain further momentum. Additionally, Oberoi Realty’s robust cash collection, stemming from the substantial completion of legacy projects, provides a solid financial foundation for future growth.
Sobha Developers, a market leader in Bengaluru, continues to impress with its unique backward integrated business model, which ensures stringent quality control and timely project delivery. With a robust launch pipeline of 18 million square feet as of 1QFY25, JM Financial expects the company to launch approximately 8-9 million square feet annually over the next few years. Pre-sales are projected to reach ₹8,600 crore by FY26, which could lead to a re-rating of Sobha’s extensive land bank.
Lastly, Keystone Realtors has emerged as a prominent player in the Mumbai Metropolitan Region, adding 16 projects with a gross development value of nearly ₹15,000 crore since FY23. This aggressive business development strategy is expected to translate into strong performance in the coming quarters, with new launches and pre-sales likely to reflect this momentum. As these five developers continue to navigate the thriving real estate landscape, JM Financial’s coverage underscores their potential to drive sector growth and deliver substantial returns in the upcoming fiscal year.
