Hold Oberoi Realty; target of Rs 590: ICICI Direct

ICICI Direct's research report on Oberoi Realty

Oberoi Realty’s (ORL) sales volumes grew 65.3% QoQ (de-grew 16.3% YoY) to 2.4 lsf. Revenues de-grew 32.0% YoY to Rs 601.5 crore due to high base. EBITDA margins declined 12.7 percentage points YoY to 39.0% on account of higher revenue booking from low-margin Borivali projects. Consequently, PAT de-grew 50.2% YoY to Rs 152.1 crore.

Outlook

However, following the NHB circular on subvention scheme, residential sales momentum could be impacted in the interim until launch of Goregaon & Thane projects. We downgrade recommendation on the stock to HOLD with a TP of Rs 590/share.