Nifty Realty enters bear market territory with 17% correction from peak
Nifty Realty Index fell 3% in Monday's session, extending total correction to 17% from 52-week high and entering bear market territory. Major stocks like Godrej Properties, DLF, and Lodha Group declined up to 5% amid sector-wide selling pressure. Keystone Realtors reported mixed Q3FY26 results with 13% growth in area sold but 3% decline in pre-sales to ₹837 crore. Despite sharp correction, analysts expect potential 2026 recovery supported by anticipated rate cuts.
*this image is generated using AI for illustrative purposes only.
The Nifty Realty Index extended its decline in Monday's trading session, falling close to 3% and pushing its cumulative correction to 17% from the 52-week high. With losses of this magnitude, the index has officially entered bear market territory, reflecting sustained selling pressure across real estate counters.
Major Realty Stocks Lead Sectoral Decline
Heavyweight real estate companies bore the brunt of the selloff, with several prominent names emerging among the session's top laggards:
| Company | Decline |
|---|---|
| Godrej Properties | Up to 5% |
| DLF | Up to 5% |
| Lodha Group | Up to 5% |
The weakness in realty stocks contributed significantly to the sector's drag on the broader market, as selling pressure remained visible across most real estate counters.
Broader Market Context
The realty sector's decline occurred amid a broader market selloff, with Indian equities trading near the day's lows. Key market indicators reflected the negative sentiment:
- Benchmark indices declined nearly 1% each
- Nifty slipped below the 25,700 mark
- Realty and capital market goods stocks led sectoral losses
The combination of sector-specific weakness and overall market pressure weighed heavily on investor sentiment throughout the session.
Keystone Realtors Reports Mixed Q3FY26 Performance
Among individual company updates, Keystone Realtors, the Mumbai-based developer, reported mixed operating performance for the December quarter:
| Metric | Q3FY26 Performance | Change (YoY) |
|---|---|---|
| Area Sold | 0.46 million sq ft | +13% |
| Pre-sales | ₹837.00 crore | -3% |
| Collections | ₹524.00 crore | -3% |
While the company demonstrated healthy volume growth with a 13% year-on-year increase in area sold, value metrics softened with both pre-sales and collections declining by 3%, suggesting a possible shift in the sales mix.
Analyst Outlook for Sector Recovery
Despite the sharp correction, some market analysts see potential for recovery ahead. Venugopal Garre of Bernstein expects a potential turnaround in Indian real estate stocks in 2026, upgrading the sector from its earlier 'Underperform' rating. Key factors supporting this outlook include:
- Property cycles typically spanning six to seven years
- Sharp correction in stock prices creating value opportunities
- Expected 50 basis point rate cut over the course of the year
- Potential support to housing demand as borrowing costs moderate
The analyst views the current correction as a catch-up opportunity following a weak 2025 performance, with easing interest rates potentially providing incremental support to housing demand and valuations.
16
