CLSA expects the real estate sector to benefit from an interest rate cycle reversal and sees the rally extending beyond luxury housing.
Key points from CLSA:
It expects a 25 basis point repo rate cut from the current MPC meeting, taking year-to-date cumulative cuts to 75 basis points.
It anticipates an additional 50–75 basis points of cuts during the rest of FY26.
Affordable and mid-income housing, which lagged luxury housing post calendar year 2022-23 rate hikes, are likely to benefit now.
Key beneficiaries include Sobha (upgraded to Hold from Underperform), Prestige, Godrej Properties, and Sunteck Realty.
REITs and large rental players like DLF and Phoenix Mills should also benefit from lower debt costs and mild asset reflation.
Disclaimer: The views and target prices mentioned in this article are as stated by CLSA. They do not represent the opinions or recommendations of this publication. Readers are advised to consult their financial advisors before making any investment decisions.
