August 23, 2016 / 18:25 IST
Motilal Oswal's research report on Oberoi Realty
Revenue grew 52% YoY to INR 3.2b, EBITDA grew 30% YoY to INR 1.7b, and PAT grew 30% YoY to INR 1.1b. EBITDA margin shrank 9pp YoY but expanded 6pp QoQ to 52%. The P&L strength is attributable to strong revenue recognition from Esquire in 1QFY17. Rental income was down 1.3% QoQ/YoY to INR 0.7b, led by decline in rentals from Westin. Average monthly rental per square foot from Commerz II Phase-I increased from INR 117 in 4QFY16 to INR 122.
Despite a sluggish market, OBER’s new operating cycle has been strong, with the success of Three Sixty West and its Borivli project. This speaks volumes about the company’s brand equity, product attractiveness, and cash flow strength. We maintain our positive bias on the stock. It trades at 16.8x FY17E EPS, 1.8x FY17E BV, and at an 18% discount to NAV of INR 352. Maintain Buy; OBER is our preferred Mumbai play.
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