Mumbai: India's real estate stocks tumbled on Monday as layoffs at the country's largest IT services firm, Tata Consultancy Services (TCS) cast a shadow on housing demand from software professionals. The selloff in real estate was broad-based, with all 10 index constituents ending in the red. Lodha Developers was the biggest laggard, falling 6.31%, followed by Godrej Properties (-5.44%), Brigade Enterprises (-4.41%) and DLF (-4.30%)."If layoffs do materialise, it could significantly impact real estate sales, especially in IT-driven markets like Bengaluru," said Sneha Poddar, VP - Research, Wealth Management at Motilal Oswal Financial Services.TCS plans to reduce its workforce by approximately 2%, or 12,000 employees. Investors worry that other IT bigwigs may follow suit.Historically, whenever the IT sector has faced slowdowns or job losses, the real estate market in these regions has seen a corresponding dip. The Bengaluru market is likely to feel the most immediate impact, with a possible ripple effect across other metro cities like Mumbai and Hyderabad, Poddar added.Vikram Kasat, head - advisory at PL Capital, noted that the Nifty Realty Index has already corrected more than 26% from its peak, making it one of the most vulnerable sectors in 2025. He advised investors to focus on blue-chip developers with strong fundamentals and use any weakness as a buying opportunity.He also cautioned that realty firms in South India could be hit harder due to their dependence on IT-driven demand.While many companies have a strong pipeline of projects and new launches, analysts said the actual conversion into sales and cash flow has fallen short. This is especially concerning for the industry because pre-sales and collections are among the most critical metrics for assessing real estate health.122962990More Steam Left?Some analysts remain optimistic about the sector's prospects. Pankaj Kumar, VP-Fundamental Research at Kotak Securities, expects residential developers to post strong results in Q1FY26He said valuations are attractive, with most listed developers trading at 8-11 times adjusted Enterprise Value (EV) to EBITDA, a key profitability metric used to compare companies on operating earnings relative to their valuation.The outlook could further improve following RBI's recent 50 basis point interest rate cut.
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