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Last Updated : Oct 21, 2020 11:30 AM IST | Source: Moneycontrol.com

Buy Oberoi Realty; target of Rs 485: ICICI Direct

ICICI Direct is bullish on Oberoi Realty recommended buy rating on the stock with a target price of Rs 485 in its research report dated October 20, 2020.

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ICICI Direct's research report on Oberoi Realty


Oberoi Realty’s (ORL) resilient Q2FY21 print was a pleasant surprise as the sales volumes decline of 6.6% YoY at 1.3 lakh sq ft was much better than the anticipated 30% decline. However, key highlight was the company’s intent to sell a minority stake in commercial assets (on a platform basis to unlock value as well as for growth capital). On the financials front, revenues declined 35.7% YoY to Rs 316 crore in Q2FY21. Among major segments, revenue from projects, rent, hospitality has declined 39%, 8.6%, 79.6% YoY to Rs 214.2 crore, Rs 85.4 crore, Rs 6.3 crore, respectively. EBITDA margins expanded ~15.7 percentage points (pp) YoY to 59% given the revenue mix and lower cost recognition in the residential segment. PAT was up 0.5% YoY to Rs 138.7 crore.


Outlook


While we are impressed by residential recovery, launch response will be key ahead. The commercial assets stake deal, however, could be a key trigger, going ahead. Valuation pegging at higher end will drive the overall NAV upwards while sum raised would also drive business expansion plans, Thus, we upgrade to BUY (vs. HOLD earlier) with a revised target price of Rs 485.


For all recommendations report, click here


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First Published on Oct 21, 2020 11:30 am
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