Jefferies has maintained a bullish outlook on the real estate sector, highlighting that supply catch-up is expected to support volumes in the coming quarters. The brokerage noted that residential markets have shown a strong start to CY25, with value sales up 10% following approximately 5% value growth in the past six months.
Jefferies observed that supply declined 19% year-on-year in H2CY24, but with elections in the base, they expect rising supply in 2025. The brokerage anticipates that the revival of mid-segment launches and still-low volumes in several cities compared to previous cycles will continue to support demand.
Jefferies pointed out that realty stocks are currently trading below average NAVs, and recent promoter buying from the open market indicates confidence in the business. As a result, the brokerage has expressed a preference for DLF, Godrej Properties, and Lodha as its top picks in the real estate sector.
Sector outlook:
Jefferies expects the real estate market to benefit from increased supply and demand stability, supported by favorable pricing and strategic expansions by leading developers. The brokerage remains optimistic about the long-term growth prospects of the sector.
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