YES Securities' research report on Oberoi Realty
Oberoi Realty (OBER) achieved pre-sales of 0.97msf translating to Rs60,228mn, is optically higher as adjusted for Oasis Realty inventory. Excluding it, achieved pre-sales of 0.16msf translating to Rs6732mn and collected Rs8537mn. Oberoi Mall reported revenue/EBITDA of Rs365/Rs328 a decline of 2.3%/7.5% q/q wherein rentals rates per/sft/mnth was up by 13.8% q/q to Rs265. Office assets cumulatively reported revenue of Rs370mn, up by 1.6% q/q with EBITDA of Rs337mn. The Westin recorded strong uptick in ARR/RevPAR to Rs13,723 (11.2% q/q)/ Rs11,558 (16% q/q) resulted in revenue of Rs461mn with operating margin of 45% up 700bps q/q. OBER delayed the launch of Thane projects and is now slated in H1FY24 even after receiving necessary approvals. OBER received RERA for its Kolshet phase-I (0.99msf) and has 31st Dec-28 as proposed date of completion hence we believe it is on the verge of launch. (Source: MAHARERA) Post result commentary for Q4FY23 was grossly weak due to lack of clarity of launch pipeline (even barring Thane), while management was confident to monetize its Mulund projects (~40% inventory) in next 2-3 years. OBER received part OC for Commerz-III and plans to deliver fully in Mar-24 while Borivali mall is expected in H1CY24. As Oasis Realty ceased to be recognized as a JV and will directly start contributing to the topline from FY24 onwards, our revenue/EBITDA/Adj. PAT estimates up by 15%/20%/17% for FY24E and 14%/18%/10% for FY25E. As all the residential projects are cash flow positive and gearing of 0.25x, management is focusing to strengthen the launch pipeline. We believe with sustenance of strong demand for larger houses, new launches to do well for OBER on the back of quality product & delivery track record.
Outlook
We continue to give a 20% premium to the current portfolio for being leader in the premium residential segment & arrived at SoTP based NAV of Rs1229/share and recommend ‘BUY’ rating with 34% upside.
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