Bengaluru real estate defies slowdown; Gurugram under pressure; 2 stock picks

Bengaluru's real estate market has defied expectations of a slowdown, despite various macroeconomic challenges. Factors such as declining interest rates, low inflation, income tax breaks, and a favourable monsoon have fostered growth, Antique Stock Broking said adding that these elements have been encouraging, especially for the real estate sector, the brokerage said.  

Despite the positive developments, Antique Stock Broking highlighted some potential risks. It said trade uncertainty with the US and IT companies laying off employees have led to a downside risk. These factors could impact sentiment in the real estate market, with varying results across different regions.

In its channel checks, Antique Stock Broking observed that "Bengaluru, Pune, and Hyderabad witnessed good absorption, MMR is seeing muted absorption, Antique said." North Bengaluru and certain micro-markets in Pune and Hyderabad have shown strong demand, particularly for properties within certain price brackets. This trend suggests a robust interest in affordable housing options, which continues to drive market dynamics.

In contrast, the Mumbai Metropolitan Region (MMR) has experienced muted absorption, with customers delaying purchase decisions. "In NCR, Gurugram is seeing pricing pressure on the back of low absorption whereas NOIDA continues to witness healthy demand, the brokerage said." This shows a mixed picture within the National Capital Region (NCR), with some areas performing better than others.

Sobha and Aditya Birla Real Estate Ltd are top real estate picks, the broking firm said. 

Antique Stock Broking also pointed out that real estate launches have been delayed, with most expected in the latter half of FY26. "Antique said launches are largely back-ended to 2HFY26 with limited launches in 2QFY26, thus July/ August trends are largely on the basis of sustenance sales trends." This indicates that the market is currently relying on existing sales trends until new projects come online.

The brokerage identified Sobha and Aditya Birla Real Estate as their top stock picks, citing their strong performance and potential in the current market environment. These companies are well-positioned to benefit from the anticipated launches and sustained demand in key markets.

Industry competitiveness remains high, especially for redevelopment projects in MMR and Gurugram. The race to acquire projects is driving up valuations, impacting margins, but offering advantages to firms with a robust pipeline. This competition underscores the importance of financial strength in maintaining market presence amidst fluctuating conditions.

Looking ahead, the response to upcoming project launches will be a critical factor to monitor. As the real estate market continues to navigate both opportunities and challenges, the performance of top players like Sobha and Aditya Birla Real Estate could set the tone for future trends and investor confidence. The evolving landscape will require adaptability and strategic foresight from all stakeholders involved.