Indian real estate market has witnessed strong sales and majority of listed companies in real estate sector have reduced their debt in the recent quarters. With better sales and low inventory of flats, real estate companies could see a re-rating in the coming weeks and medium to long term investors can consider buying some of the best performing stocks. In the past year, the real estate market in India’s top seven cities has reached new highs, with buyer demand strongly leaning towards branded developers. The top eight listed players—Sobha Ltd., Puravankara Ltd., Prestige Estates, Kolte Patil, Mahindra Lifespace Developers Ltd., Godrej Properties Ltd., DLF Limited, and Lodha Developers (Macrotech)—have reported impressive sales and a noteworthy reduction in their net debt. Between FY 2019 and FY 2025, the debt burden of these developers has declined significantly, driven by surging sales and strategic expansion. However, some developers have seen a rise in debt due to aggressive expansion and land acquisition strategies.

Residential Sales Surge to Record Highs

Buyer demand focuses on branded developers
In the past year, residential sales have reached unprecedented levels across India’s top seven cities. This demand is particularly concentrated on branded developers, with the top eight listed players experiencing robust sales figures. Buyer confidence has solidified around established names in the industry, leading to consistent performance across their respective portfolios.

Top Developers Continue to Excel in Sales

Top eight players record impressive growth
Sobha Ltd., Puravankara Ltd., Prestige Estates, Kolte Patil, Mahindra Lifespace Developers Ltd., Godrej Properties Ltd., DLF Limited, and Lodha Developers have all seen significant sales growth. Despite varied economic conditions, these developers have been able to consistently report strong performance, much to the satisfaction of their investors.

Debt Reduction Signals Financial Prudence

Debt reduction between Q4 FY2019 and Q1 FY2025
Notably, DLF Ltd. and Kolte Patil have seen substantial debt reductions, with DLF reducing its net debt by over 165% and Kolte Patil by 107%. Lodha Developers also reported a major debt reduction of 83% over the same period. These reductions are reflective of their ability to generate surplus cash through enhanced sales performance and strategic cost management.

Net Debt Falls Significantly Across Top Players

Overall debt decline of over 54%
According to Dr. Prashant Thakur, Head of Research at ANAROCK Group, the collective net debt of the top eight players reduced by more than 54%, from INR 44,817 Cr in FY 2019 to INR 20,808 Cr by Q1 FY 2025. This marks a significant improvement in their balance sheets, driven by enhanced revenues and efficient debt management strategies.

Aggressive Expansion Fuels Debt for Some Developers

Land acquisition and geographic expansion contribute to rising debt
Despite the overall trend of debt reduction, some developers saw their net debt rise during this period. This can largely be attributed to their aggressive expansion strategies, particularly their acquisition of land across various cities. These developers have focused on broadening their geographical presence, which has required considerable capital investment.

Staggering Growth in Booking Values

Booking values jump by 234% since FY2019
Investor presentations highlight a sharp rise in booking values for these developers. From a collective booking value of INR 27,144 Cr in FY2019, this figure soared to INR 90,573 Cr in FY2024, marking a 234% increase. This surge reflects both the strong demand for residential properties and the successful execution of these companies' projects.

Q1 FY2025: A Strong Start to the Year

Booking value reaches 99% of FY2019's total in just one quarter
The first quarter of FY2025 alone saw a collective booking value of INR 26,832 Cr for the top eight developers—nearly 99% of the total value recorded in FY 2019, and 30% of the total for FY2024. With three more quarters remaining, this sets a positive outlook for the remainder of the financial year, suggesting that the upward trend in sales and financial health will continue.