HSBC picks Godrej Properties, DLF, Sobha as top FY26 real estate bets

Godrej Properties, DLF, and Sobha have been named the top real estate stock picks for FY26 by global brokerage HSBC, which expects the sector to benefit from a pickup in new project launches, continued pre-sales momentum, and strong financial fundamentals.

In its recent sector note, HSBC said the real estate market is poised for steady growth in the coming fiscal year, supported by healthy levels of unsold inventory, manageable leverage, and robust free cash flow (FCF) momentum. The brokerage has maintained a ‘Buy’ rating on all three stocks, while assigning a ‘Hold’ on Oberoi Realty, citing limited near-term catalysts.

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The bullish stance comes amid renewed investor interest in the real estate sector, which received a boost from the Reserve Bank of India’s latest policy actions. On June 6, the RBI announced a 50 basis point cut in the repo rate—its third consecutive reduction this year—following earlier cuts in February and April. The move sparked a rally in property stocks, with the Nifty Realty index jumping 4.68 per cent, marking a second straight session of strong gains.

Investor sentiment was further lifted by the RBI’s decision to reduce the Cash Reserve Ratio (CRR) by 100 basis points, a step that will inject approximately Rs.2.5 lakh crore in liquidity into the banking system. The additional liquidity is expected to bring down funding costs for banks and lower borrowing rates for developers and homebuyers.

Other brokerages are also optimistic. CLSA (Credit Lyonnais Securities Asia), a leading Hong Kong-based investment and brokerage firm known for its Asia-focused research, identified Sobha, Prestige Estates, Godrej Properties, and Sunteck Realty as key beneficiaries of the current macro environment.

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Meanwhile, rental-heavy players such as DLF and Phoenix Mills, along with real estate investment trusts (REITs), are expected to benefit from lower debt servicing costs and potential revaluations of leased assets, as financing conditions ease.