Motilal Oswal's research report on Oberoi Realty
Oberoi Realty (OBER) reported sales bookings of INR6.7b (in line with our estimate of INR7b), which was down 27% YoY, due to the absence of any major launches and a drop in sales velocity across projects in Borivali, Goregaon, and Mulund (Enigma). Total units sold were down to 107 from 234 in 4QFY22. After a muted performance in 3QFY23, sales at Elysian, Goregaon, have shown signs of recovery, with reported bookings of 12 units. Additionally, OBER sold three units in 360-west, Worli, from its own inventory, following a settlement with its JV partner. Collections were down 10% YoY, but doubled QoQ to INR8.5b, as the company started handing over units in Mulund projects. Mismatch in timing of stamp duty and tax payments with regards to transfer of units in 360- west led to an increase in net debt by INR6b to INR31b. However, D/E remained flat at 0.25x, due to a rise in equity, led by recognition of profits from the transaction
Outlook
While the launch of Thane projects will be a key growth driver in FY24, new land acquisitions are key to providing long-term growth visibility, due to shrinking inventory from existing key projects such as Borivali and Mulund. Thus, business development remains a key re-rating trigger for the stock. We reiterate our BUY rating with increased SoTP-based TP of INR1,140 as we roll-forward our valuation to Mar’25.
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