Continuing to reap dividends from the post-pandemic surge in demand for branded homes, the top 9 stock exchange-listed developers raked in INR 14,883 Cr of revenue bookings in H1 FY22 – a sharp uptick from INR 9,483 Cr in the same period of the previous fiscal.

Even as the second COVID-19 wave wreaked economic havoc during Q1FY 22, these players effectively clocked a 57% annual growth in their overall residential booking revenues in H1 FY22.

Anuj Puri, Chairman – ANAROCK Group, says, “In terms of area, these 9 listed developers sold approx. 18.46 mn sq. ft. of housing space in H1 FY22, again in remarkable contrast to approx. 13.28 mn sq. ft. in the corresponding period a year ago. Amounting to annual growth of 39%, the total residential area sold in H1 FY22 has also surpassed that of the corresponding pre-COVID-19 H1 period (FY20 period), when approx. 17.2 Mn sq. ft. area was sold.”

The top listed developers analyzed are Sobha Ltd., Puravankara Ltd., Prestige Estates, Brigade Enterprises Ltd., Mahindra LifeSpaces Developers Ltd., Godrej Properties Ltd., Oberoi Realty Ltd., Kolte-Patil Developers, and Macrotech Developers (previously Lodha Group). ANAROCK has collated data as per investor presentations of each of the companies.

Driven by homebuyers’ increasing preference for branded homes, the listed developers have once again out-performed the market. Notably, these players have also reconfigured their supply pipeline to deliver projects in the affordable, mid-segment, and premium segments. The ongoing low-interest rate regime and homebuyers’ desire to avoid construction-related risks also played a role.

“Less than a decade ago, a largely speculator-driven housing market saw unnatural demand chasing the wrong kind of supply,” says Puri. “Today, these players are unleashing right-priced, right-sized supply clearly aimed at organic end-user demand. This is the result of intensive market research before pressing the ‘commit’ button and is one of the most notable features of the reinvented Indian housing market.”

(Source: Firms’ investor presentations & ANAROCK Research)

Quarterly Trends

As expected during H1 FY22, the residential market’s second-quarter performance was significantly better than the first. For the Indian economy at large, the second pandemic wave in April and May of this fiscal year was far more devastating than the first wave in 2020 that had a major dampening impact on residential activity. Nevertheless, in terms of activity, the second wave quarter fared slightly better than the first.

Quarterly Performance – Key Highlights:

• The top 9 listed players collectively sold homes worth INR 10,669 CR in Q2 of FY22 (July to September). Their booking revenue in this given quarter rose by a staggering 89% against the same period in the last fiscal (Q2 FY21), when it was INR 5,645 Cr.
• The total area sold by these developers in Q2 FY22 also saw an 83% growth – from approx. 7.38 mn sq. ft. in Q2 FY21 to nearly 13.47 mn sq. ft. in Q2 FY22.
• As for the first quarter of FY22 (when the second pandemic wave was at its worst), the top 9 listed players sold approx. 4.99 mn sq. ft., while a year ago in Q1 FY21, the area sold was more at 5.9 mn sq. ft.
• While in the first quarter of FY22, the total area sold by these top 9 developers saw a yearly drop of 15% compared to Q1 FY21, their booking revenue was 10% more than the preceding period – approx. INR 4,214 Cr in Q1 FY22 against INR 3,838 Cr in Q1 FY21. This may indicate higher sales in the mid to premium categories.

About the author- Anuj Puri, Chairman – ANAROCK Group