Buy Oberoi Realty; target of Rs 1200 : Motilal Oswal

Motilal Oswal's research report on Oberoi Realty

As per our channel checks, OBER’s Thane launch has been pushed out to 1QFY23 (likely in Apr’22) v/s our initial expectation of an early launch in Mar’22 as the company awaits approvals. We had assumed INR6b of sales from the Thane project in 4QFY22, which will now spill over to FY23. While the delayed launch will impact our 4QFY22 presales/collections estimate, sales momentum in ongoing projects has largely remained intact. As per registry data, both Feb’22 and Mar’22 (till date) have reported a 25-30% rise in Mumbai property sales MoM. Total registrations are likely to end 35- 50% higher in 4Q than the rest of the quarters in FY22. Project wise registration data till the beginning of Mar’22 for OBER indicates sales of 15-20 units across all projects, except Sky City, Borivali, which reported sales of ~75 units. With a further pickup in momentum in Mar’22, we expect the quarterly run-rate across all projects to at least remain intact, if not increase further. On the back of a delayed launch, we reduce our FY22 pre-sales estimate by 14%, but increase the same by 4%/7% for FY23/FY24 to account for the spillover.

Outlook

The Thane launch; restart of sales in Three Sixty West, Worli; and progress on new land acquisitions are key near term triggers for the stock. We maintain our Buy rating with a SoTP based TP of INR1,200.

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