The Union Budget 2026–27 did not provide direct incentives for the real estate sector but established a supportive macro framework through sustained public capital expenditure, urban development initiatives and financial reforms. The enhanced capital outlay of ₹12.2 lakh crore, along with the focus on City Economic Regions, is expected to strengthen construction activity, expand urban infrastructure and support real estate demand across Tier-II and Tier-III cities, thereby broadening growth beyond major metropolitan markets.

Structural measures such as monetisation of CPSE-owned real estate through REITs, the proposed Infrastructure Risk Guarantee Fund and improved municipal financing are likely to deepen capital flows, reduce project-phase risks and enhance urban liveability. Continued investment in transport connectivity and simplification of property-related tax compliance further support long-term sector fundamentals, reinforcing an ecosystem-driven approach rather than short-term stimulus.

Within this policy environment, the performance of listed real estate companies points to increasing differentiation. On a year-on-year basis, most leading developers have reported healthy growth in revenues, profits or pre-sales, signalling sustained demand across residential and commercial segments, while quarter-on-quarter performance remains uneven due to project-linked revenue recognition. Developers such as DLF, Lodha and Prestige have shown strong sales momentum, while Phoenix Mills continues to benefit from stable, recurring rental income, resulting in lower earnings volatility. Oberoi Realty follows a more conservative growth path supported by a strong balance sheet, whereas Godrej Properties and Anant Raj exhibit higher execution-linked variability.

This divergence becomes clearer when viewed through recent QoQ and YoY operating trends, valuation multiples and institutional ownership behaviour. Companies with strong execution visibility and income stability command premium valuations, while those with moderate leverage and improving return profiles trade at more balanced multiples. Institutional trends further reinforce this segmentation: FIIs have moderated exposure in several residential-heavy developers on a YoY basis, while remaining constructive on commercial-led platforms such as Phoenix Mills; in contrast, DIIs have gradually increased holdings across multiple names, indicating confidence in domestic real estate fundamentals despite near-term volatility.

Importantly, this assessment follows the same research framework that earlier delivered constructive insights in the metals space – most notably in our analysis of Hindustan Zinc, which subsequently played out as expected. Applying a similar fundamental and institutional lens, this real estate note represents another report in which we place a high degree of analytical conviction from a medium-term investment perspective.

Viewed through this lens, conviction within the real estate sector increasingly aligns with scale, earnings visibility and balance-sheet strength. DLF Ltd emerges as the highest-conviction name given its strong year-on-year growth, rising annuity income, even as foreign institutional participation moderates marginally. Phoenix Mills is also favourably positioned due to its stable, rental-led business model and lower earnings volatility, which continues to attract institutional interest. Macrotech Developers offers a balanced risk–reward profile supported by healthy sales momentum and valuation comfort, though with higher residential cyclicality. Prestige Estates Projects remains a strong growth-driven play, but premium valuations and selective FII selling warrant a more measured stance. At the lower end of conviction, Oberoi Realty reflects conservative growth with balance-sheet strength but limited near-term acceleration, while Godrej Properties continues to exhibit execution-linked volatility despite strong bookings and rising domestic institutional support. Anant Raj remains the most selective exposure, given its regional concentration and limited institutional participation.  Within this framework, DLF Ltd and Anant Raj emerge as our top picks, offering a combination of strong fundamental traction and differentiated risk-reward positioning across large-cap and selective mid-cap exposure.

Company	Revenue / Profit QoQ	Revenue / Profit YoY	P/E	FII Holding Trend (YoY)	DII Holding Trend (YoY)
DLF	↑ 20–25%	↑ 30–35%	37.28	↓ (moderate)	↑ (gradual)
Macrotech (Lodha)	↑ 8–12%	↑ 14–18%	30.85	Stable / ↓ marginal	Stable
Prestige Estates	↑ 10–15%	↑ 100%+	68.43	↓	↑
Phoenix Mills	↑ 3–6%	↑ 14–16%	54.41	↑	Stable
Oberoi Realty	↓ 15–20%	↑ 5–7%	24.55	Stable / ↑	Flat / Low
Anant Raj	↑ 5–10%	↑ 20–25%	38.04	Limited	Limited