Bengaluru-based real estate stocks traded mostly lower on Thursday, February 12, as mounting concerns around artificial intelligence-led disruption in the IT sector weighed on investor sentiment. Shares of Prestige Estates and Puravankara fell up to 2 per cent, while Sobha and Brigade Enterprises declined by as much as 1 per cent. Other developers such as Oberoi Realty and Macrotech Developers (Lodha) also traded in the red with marginal losses.
Market experts attributed the decline to a mix of sector-specific and macroeconomic factors rather than any company-specific development. Bengaluru, India’s technology capital, derives a substantial portion of its residential demand from IT professionals. Any slowdown in hiring, salary growth, or workforce expansion in the sector has a direct bearing on housing absorption, particularly in mid-to-premium segments. According to Avinash Gorakshkar, a SEBI-registered fundamental equity expert, a weak outlook for the IT industry is expected to impact sales volumes of Bengaluru-based real estate companies. The concern stems from fears that rapid advancements in artificial intelligence could lead to job rationalisation and slower hiring across technology firms. The pressure on realty stocks coincided with a sharp sell-off in IT counters. Infosys, Tata Consultancy Services and Mahindra & Mahindra were trading around 5 per cent lower at the time of reporting, while Wipro and HCL Tech were down approximately 4 per cent. The IT index has been under strain amid global weakness in technology shares and renewed anxiety over AI-driven competition.
Stronger-than-expected US jobs data further dampened hopes of near-term rate cuts by the US Federal Reserve, adding to the broader risk-off mood in equity markets. Higher-for-longer interest rate expectations typically affect capital-intensive and cyclical sectors such as real estate, both from a funding cost and valuation perspective. Seema Srivastava, Senior Equity Research Analyst at SMC Global Securities, noted that elevated valuations following a multi-year rally in property stocks have also triggered profit-booking. She added that recent pre-sales data and management commentary across the sector suggest that the housing cycle may be transitioning into a more mature phase with moderated growth. Concerns around inventory build-up, working capital pressures and a potential slowdown in new launches have further contributed to cautious sentiment. While underlying demand fundamentals in Bengaluru remain supported by infrastructure upgrades and metro expansion, the immediate stock market reaction reflects heightened sensitivity to developments in the IT sector.
For investors, the trajectory of IT hiring trends, earnings guidance and global macro signals will be key determinants of near-term direction in Bengaluru-focused real estate counters. At present, the correction appears driven more by sentiment and valuation recalibration than by any sharp deterioration in on-ground housing demand.
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