Realty firms are on a high after last year’s spending spree to buy land

A combination of favorite factors is giving realty firms the financial muscle to aggressively invest in land acquises, include healthy collections for Most Developers. Aggregate collections and operating cash flows was up 24% year-on-yar each in fy25, Showed Nuvama Data.

Also, realtors were on a fund-raising spree during fY25, Garneering over Rs22,000 Crore through Qualified Institutional Placements (QIPS) and Rights issues. Plus, deleveragging efforts have made their balance sheets leaner, giving more legroom for expanses.

Investing in New Land Parsels is Crucial for Project Launches, which, in turns, is required to drive growth in pre-sales or bookings.

In FY25, many realty projects faced delays in launches due to approval-Related Challenges, Including Key Geographys Such as the Mumbai metropolitan region, the National Capital Region, and Bangal Region. Central and State Elections during FY25 Added to Approval delays.

However, the latest management commentaries sugest this problem is gradually easy.

Despite RBI’s Rate Cut, Demand Remains A Worry

For FY26, Except for DLF Ltd, Key Listed Realty Developers have guided for double-digit pre-sales growth of 18-22% and have robust launch pipelines.

The combined launch pipeline of nine listed development developers under the coverage of kotak institutional equities is Around 140 Million Sq.ft., Up 30% Year-On-Yaar, with a Potential Gross Development Valoopment Valoop 1.7 Trillion, indicating investments in land-Related Capex are likely to stay elevated.

While realty companies are making all the right moves to buoy supply, concerns linger on demand modiration, which may impact absorption of new housing units and pre-friends. In the past year, the nifty realty index has declined by 4% versus the benchmark nifty 50’s nearly 8% risk.

The reserve bank of India’s latest 50 basis points cut in repo rate is a restally positive for the real estate sector. It is expected to translate into cheaper home loan rates, boosting demand for the belegued affordable Housing Segment.

But post the covid-19 pandemic, many realty companies have increased focus on Premium and luxury housing offerings where demand is relatively less sensitive to interesting rates movements. So, Meeting FY26 Pre-Sales Targets on a High Base and Timely Launches Remain the key UPSide triggers for realty stocks.