Buy Oberoi Realty; target of Rs 315: Emkay

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26 Aug, 2025 12:21

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Emkay Global Financial Services is bullish Oberoi Realty and has recommended buy rating on the stock with a target of Rs 315 in its October 22, 2012 research report.

“Oberoi Realty Topline at Rs 2.57bn is 29% up QoQ and 25% above expectations. EBITDA at Rs 1.72bn is 51% up QoQ and 43% above expectations. EBITDA margins increases by 983bps QoQ. PAT at Rs 1.4bn is up 39% QoQ and 31% above estimates. OBRE generated –ve operating cashflows of Rs 580mn in Q2FY13 against +ve cashflows Rs 604mn in Q1FY13 and Rs 836mn in Q2FY12. The fall in operating cashflows is mainly due to increase in net inventories (Inventories less customer advances) which is lead by TDR purchase of Rs 1bn, higher construction spends in near completion projects and towards Oasis, Worli.”

“Sale bookings of Rs 1.3 lsf improves marginally over Q1FY13 reported sales booking of 1.23 lsk. The incremental realisations remain subdued QoQ in Goregaon projects but increased by 9% in Splendor Grande, Andheri. OBRE would face huge competition for its Goregaon (E) projects in Q3FY13 with new launches in the vicinity. The company sustained its sales run-rate with competition from Lodha Fiorenza, but would need to see how it fares with 2 large new launches. Sunteck Realty launches phase 1 (~0.65msf) of its sizable project (~4.0msf), Sunteck City, in Goregaon (W) in Oct’12. The project is priced as a base rate of Rs 12500/sf which is similar to OBRE’s projects. Omkar Builders is planning to launch its Malad (E) project, Alta Monte, in Oct’12 with total SBA of ~2.5msf which may give tough competition on pricing front like seen in its 2 new recent launches in central Mumbai. We believe OBRE’s would sustain as these projects have sold through soft launches for last 12 months.”

“OBRE’s expected two launches, Oasis at Worli and Exotica at Mulund, are delayed further. The company does sales of some units in Oasis through soft launch to the promoter’s friends and relatives and expects to do a formal launch by FY13 after signing into the brand partner. On Mulund project, the environmental clearance has got further delayed and the launch of same should happen by FY13. We remain positive on both these projects as it will lead to higher scalability and cashflow generation. Maintain buy rating with TP of Rs 315. Catalysts of outperformance viz. new launches & land acquisition continue to disappoint,” says Emkay Global Financial Services research report.

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