Motilal Oswal's research report on Oberoi Realty
Oberoi Realty (OBER) clocked a pre-sales of INR11.5b in 2QFY23, up 39% YoY/52% QoQ and was 28% above our estimate. OBER reopened sales at its ultra-luxury project 360 West (Worli), and reported sales of eight units worth INR6b (>50% contribution). Management expects the momentum to continue. Occupancy at Commerz I improved marginally QoQ. Revenue/EBITDA for the commercial portfolio remained flat QoQ at INR711m/INR667m, respectively. ARR at the Westin Hotel improved 5% QoQ and led to flat revenue in the Hospitality segment despite a drop in occupancy to 83% in 2Q from 91% in 1Q. Revenue declined 9% YoY/25% QoQ to INR6.9b and was 27% below our estimate due to slower-than-expected execution at Mulund projects. EBITDA margin remained healthy at 45%. PAT stood at INR3.1b, up 20% YoY but down 21% QoQ and was 46% below our estimate.
Management indicated a strong visibility on business development that will provide further growth visibility and will be a key re-rating trigger. Reiterate BUY with an unchanged SOTP-based TP of INR1,100, implying 28% upside.