Key Points

The report noted that spillover of several FY25 launches will happen in FY26, delayed because of regulatory approvals. FY26 is likely to see a more back-loaded but robust pipeline, driving sustained momentum in the medium term.

According to Motilal Oswal, coverage companies are projected to post a 21 per cent CAGR in presales and a sharp 36 per cent CAGR in collections--reaching Rs 1.5 lakh crore by FY27, driven by timely execution and a solid pipeline.

Revenue across the top firms is expected to grow at a healthy 22 per cent CAGR to Rs 86,100 crore, fuelled by strong business development, execution efficiency, and upcoming deliveries.

The Financial Year 2025 commenced on a positive note for the sector but saw a slowdown in momentum toward the end of the year, particularly in project launches and home absorption across the top seven cities.

The launches in the fiscal year declined 5 per cent year-on-year, while absorption fell 10 per cent YoY. Notably, the fourth quarter witnessed subdued activities, with an 11 per cent drop in launches and a 17 per cent fall in absorption.

Factors such as state and central elections, delays in regulatory approvals, the absence of key decision-making committees, and policy changes contributed to the slowdown in new project launches.

As launches remained limited, absorption levels also weakened in key markets, the report added.

The report noted that, for the first time in five years, inventory levels of real estate companies started rising. The real estate inventory stood at 14.4 months by the end of FY25--a level unchanged from Q4 and marking the first sequential increase in 19 quarters.

However, despite the slowdown, overall absorption continued to outpace new supply, the report added.

Meanwhile, the report added that consolidation within the sector is gaining momentum. In the top seven cities, the market share of the top 10 developers in terms of launches rose from 22.7 per cent in FY15 to 31.9 per cent in FY25. Their share of absorption also climbed from 19.0 per cent to 23.1 per cent during the same period. This trend is expected to benefit leading players in the coming years, the report added.

- ANI