ICICI Direct's reserach report on Oberoi RealtyOberoi Realty’s (ORL) consolidated topline grew 2.0% YoY to | 189.2 crore below our expectation of | 205.1 crore as revenues from development properties came in lower at | 104.8 crore and were below our expectation of | 120.5 crore The EBITDA margin contracted 264 bps to 57.6% and was marginally below our expectation of 59.8% The bottomline grew 2.7% YoY to | 72.4 crore but was marginally below our expectation of | 76.1 crore Sales volumes were at 62643 sq ft and were below our expectation of 75350 sq ft as sales volume from the Mulund project were muted at 890 sq ft in Q2FY16. However, ORL received an overwhelming response to its Borivali project. The company managed to book 543 units out of ~800 units within three days of its launch We like ORL in the real estate sector given the quality of land bank, healthy balance sheet, management bandwidth to execute projects and anticipated pick-up in sales volume. We maintain our BUY recommendation with a revised target price of | 350/share. We also highlight that we have now factored in the recent QIP of ~| 325 crore, which led to equity dilution of ~3.4% in our valuation. Key risk: Further delay in launches and lower-than-expected sales volume. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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