Realty Stocks Picked by Morgan Stanley That Investors Should Keep Track Of
Housing demand in India was a bit softer earlier this year, and a lot of investors were wondering if the good run was slowing down. The latest numbers say demand is still healthy. Sales are growing, prices are firm, and unsold homes aren't piling up as fast as they were. Against this backdrop, one big global brokerage has named the developers it likes the most, and the reasons behind those picks are worth a look.
What the July-August Housing Data Shows
Morgan Stanley looked at sales across the top six cities for July and August. Sales value, which is the total money buyers paid for homes, grew 7% year-on-year. Volumes, meaning the number of homes sold, went up 2%. Prices were the stronger part, rising 14% in July and 8% in August, well ahead of CPI inflation (the usual measure of how fast everyday prices are rising).
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Inventory, or the stock of unsold homes, is also growing slower now. It rose 15% year-on-year, compared to 18% in the first half of calendar 2026. Luxury housing did even better, with sales value up 14% and volumes up 13%.
Morgan Stanley tracks five developers in this comparison, DLF, Oberoi Realty, Godrej Properties, Prestige Estates and Lodha Developers. It maintained 'Overweight' on three of them. Overweight simply means the brokerage expects a stock to do better than the others around it.
Why Godrej Properties Is In The List
Godrej Properties has the biggest FY27 pre-sales estimate among the five, at ₹39,000 crore. Pre-sales is the value of homes a company has booked in a period, even if the money and the handover come later. The company was also running ahead of its target in the first five months of FY27. Morgan Stanley's growth estimate for it is 14%.
It also looks the cheapest of the group. The stock trades at 8.9 times FY29 earnings and 7.6 times EV/EBITDA, the lowest in the comparison. P/E tells you how much you pay for every ₹1 of profit the company makes. EV/EBITDA is a similar check, but it also counts the company's debt.
Morgan Stanley called Godrej its preferred large-cap developer. It pointed to strong pre-sales growth, a healthy launch pipeline and valuations that look attractive. It also said the company's execution record and balance sheet give it room to go after growth.
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Prestige Estates Has The Highest Growth Estimate
If Godrej is about size and value, Prestige is about growth. Its FY27 pre-sales estimate is ₹30,000 crore, and the 17% growth Morgan Stanley expects is the highest among all five developers.
A Bengaluru project launched on September 25 has estimated sales potential of around ₹1,750 crore. Since it came after the July-August period, its contribution should start showing from the third quarter of FY27. Bengaluru is also a market where sales have stayed strong.
The price you pay for this is higher. At 24.5 times FY29 earnings, Prestige is the most expensive of the five on P/E. Its EV/EBITDA is 11.7 times. So the higher multiple comes along with the highest growth assumption in the group.
Lodha Developers And The Mumbai Factor
Lodha is a slightly different case. Its FY27 pre-sales estimate is ₹20,500 crore, and Morgan Stanley's growth estimate for it is 0%, which looks odd next to an Overweight call.
The big plus here is Mumbai, where Lodha has strong exposure. The city saw sales value rise 14% and volumes rise 8% in July-August. That gives the company a supportive backdrop even though the headline growth number is flat. On valuation, the stock trades at 21.2 times FY29 earnings and 16.3 times EV/EBITDA, which is the highest EV/EBITDA among the five.
Which Cities Are Leading The Growth
City-level data shows where the demand is coming from. Noida led with a 110% jump in LTM sales value, followed by Navi Mumbai at 27% and Bengaluru at 22%. LTM means last twelve months, so it's a full-year view and not just one quarter. Prices in these three cities rose 4%, 11% and 7% respectively.
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Since developers have different city exposures, these numbers matter. Prestige's Bengaluru launch is going into a market where sales are strong, and Lodha's Mumbai exposure is backed by both volume and price growth.
Luxury housing is doing well too. Morgan Stanley said growth has cooled from the very high levels seen in 2022-23, but the segment still shows healthy demand.
What To Watch Next
Morgan Stanley expects the third quarter of FY27 to be an important one for launches, with several large projects entering the market. Good demand alone won't be enough from here. Execution of these launches, along with steady pricing and demand, will decide how fast pre-sales grow for the developers. For these three stocks, that's the thing to keep an eye on in the coming months.