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Informist, Friday, Jun. 13, 2025

 

By Ishaan Sharma

 

MUMBAI – The real-estate sector presented a complex picture of resilience and challenges in the March quarter, with a notable slowdown in residential sales and sustained strength in the commercial and luxury segments. Despite a 28% on-year drop in housing sales across India's top seven cities--Mumbai Metropolitan Region, Bengaluru, Pune, National Capital Region, Hyderabad, Chennai, and Kolkata--at 93,280 units in Jan-Mar from 130,170 units a year ago, the sector showed robust fundamentals driven by urbanisation, policy reforms, and growing demand for premium properties.

 

Even though the net profit for the March quarter of the six real-estate companies in the Nifty 200 index changed little on year, it beat analysts' expectations of a 6?cline in bottom line for the sector. The top line of the companies, however, fell short of the expectation of an 18% increase, being limited to a 7% rise for the quarter. DLF Ltd. and Macrotech Developers Ltd. were the outstanding performers, hitting analysts' expectations out of the park with a near 40% rise on year in net profit for the March quarter, against the 6?ll estimated for the sector.

 

STANDOUT PERFORMERS

Three of the six companies beat the net profit estimates of brokerages, with DLF exceeding the estimates by nearly 58 percentage points. The company's net profit rose mainly on the back of strong 47% growth in revenue from operations and 21% increase in other income. The bottom line was helped by tax expenses rising a modest 6%.

 

Macrotech Developers also beat the net profit estimates of the brokerages, reporting 38% increase on year in net profit for the quarter. The Street had expected the bottom line to grow 31.2% on year. The company registered its best ever pre-sales during the March quarter at INR 48.10 billion, up 14% on year. However, this was the lowest quarterly profit growth for the company in the past four quarters.

 

Godrej Properties Ltd. also beat the Street's expectations despite a 19?ll in net profit for the reporting quarter, as the brokerages had expected the net profit to fall a steeper 49%. Oberoi Realty Ltd., which was expected by the brokerages to report a fall of 16% in net profit, performed far worse, reporting a fall of 45% on year. Prestige Estates Projects Ltd., which was expected to double its net profit for the quarter, saw its bottom line being halved on year instead.

 

MARGINS, COSTS

The six real-estate companies reported a sequential improvement in net profit margin in the March quarter. The overall net profit margin of the companies expanded 25.16% during the quarter. DLF had the highest net profit margin of 41% while Prestige Estates had the lowest margin at roughly 2%.

 

The overall input costs, including construction material expenses, for the six companies rose nearly 64% on year for the March quarter. Other expenses for the companies rose over 41% on year and finance costs declined nearly 7% on year. Tax expenses for the companies were up over 35% on year. Oberoi Realty's total debt increased 32% on year.

 

The cumulative net sales of the six companies took a hit due to slow growth of just 6% in the quarter, which was not enough to outpace expenses. The expenses of the companies for the quarter were up nearly 10% on year and over 27% sequentially.

 

SEQUENTIAL PERFORMANCE

Barring Oberoi Realty and Macrotech Developers, all the other real estate companies in the NSE 200 reported sequential growth in their results for Jan-Mar. Godrej Properties saw exceptional growth of 119% in net sales, while DLF's net profit surged around 135%.

 

Godrej Properties informed the exchanges that its board had approved fund-raising of up to INR 20.00 billion in one or more tranches through non-convertible debentures, bonds, or other debt securities, or on a private placement basis. The company launched 12 new projects during the March quarter across five cities, it said in an investor presentation. This is likely to have boosted its net sales for the quarter.

 

The new sales bookings from DLF's ultra-luxury residential project in Gurugram, The Dahlias, were INR 137.44 billion for the financial year 2024-25 (Apr-Mar), the company said in its earnings press release. DLF had opened the project for bookings in the December quarter and garnered new sales bookings of INR 118.16 billion in that quarter itself. This indicates that in the March quarter DLF recorded new sales of INR 19.28 billion for The Dahlias, accounting for a large chunk of the company's total new sales.

 

The company had earlier reported new sales of INR 191.87 billion in the three quarters till December, including record high new sales of INR 120.90 billion in the December quarter alone. However, in the March quarter, it recorded new sales of only INR 20.36 billion.

 

Oberoi Realty was the worst performer in the last quarter of FY25. The company reported sequential declines of almost 19% in net sales and nearly 30% in net profit. It also reported a 207% rise in costs relating to land, development rights, construction, and similar areas compared to the previous year, reaching INR 5.87 billion. Other costs such as finance charges, depreciation, amortisation, and other expenses went up 60-80% during the March quarter.

 

Net sales of Prestige Estates declined nearly 8% sequentially in the March quarter. However, the company's net profit jumped 41%. In the March quarter, the company sold 2,301 units, with an average realisation of INR 15,524 per square foot compared to 1,666 units sold in the year-ago quarter with an average realisation of INR 11,459 per square foot.

 

Macrotech Developers reported subdued earnings for the quarter, with net profit and net sales both going down sequentially.

 

The following table shows the performance of the six companies in the real estate sector along with the consensus estimate for each company as well as the consensus estimate for the sector and the Nifty 200 index. 

 

Company	PAT beat analysts' estimate	PAT growth estimate %	PAT beat sector estimate	PAT beat Nifty 200 estimate	Revenue beat analysts' estimate	Revenue growth %	Revenue growth estimate %	Revenue beat sector estimate	Revenue beat Nifty 200 estimate
Real-estate sector		(-)5.62					18.76
Nifty 200		0.8					5.2
DLF Ltd.	YES	39.26	YES	YES	YES	46.50	3.05	YES	YES
Godrej Properties Ltd.	YES	(-)18.94	NO	NO	YES	48.78	(-)3.03	YES	YES
Macrotech Developers Ltd.	YES	38.50	YES	YES	NO	5.12	10.62	NO	YES
Oberoi Realty Ltd.	NO	(-)45.03	NO	NO	NO	(-)12.52	22.69	NO	NO
Prestige Estates Projects Ltd.	NO	(-)82.14	NO	NO	NO	(-)29.37	78.81	NO	NO
The Phoenix Mills Ltd.	NO	(-)16.89	NO	NO	NO	(-)22.18	(-)10.19	NO	NO

 

 

The following table shows the profit margins of the real-estate companies that are part of the Nifty 200:

 

Company	Adjusted PAT Margin for Jan-Mar 2025	Adjusted PAT Margin for Jan-Mar 2024	Adjusted PAT Margin for Oct-Dec 2024
DLF Ltd.	41.00%	43.13%	69.26%
Godrej Properties Ltd.	18.00%	33.05%	16.79%
Macrotech Developers Ltd.	21.82%	16.56%	23.13%
Oberoi Realty Ltd.	37.66%	59.94%	43.82%
Prestige Estates Projects Ltd.	1.64%	6.47%	1.07%
The Phoenix Mills Ltd.	26.72%	25.02%	27.15%

 

End

 

Data compiled by Vinod Bhovad

Edited by Rajeev Pai

 

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