HDFC Securities' research report on Oberoi Realty
Oberoi Realty (ORL) is set for a new phase of growth with new project launches planned for the next few years. After having registered decent presales of INR 51bn (+31% YoY) in FY23, we expect it to clock INR 65bn in presales in FY24, backed by new tower launches in Goregoan Garden City and its first project launch in the Thane micro market. Commerz 3, under its commercial portfolio, is expected to be operational by Mar’24 (INR 5bn annual rental expected at maximum occupancy) and the Borivali mall is expected to start by Jun’24 (INR 3.5bn annual rental expected at maximum occupancy). Whilst the leads pipeline is strong, the management bandwidth will incrementally be used for new business development and launches. The gross debt stands at INR 39bn (up from INR 30bn in Dec’22), mainly on account of financing of a unit sale transaction with Oasis Realty. We believe ORL will generate robust cash flow from ready-to-move-in inventory in the 360W and Mulund projects. Besides, new business development outside MMR shall aid further rerating.
Outlook
We remain constructive on ORL and maintain BUY, with an unchanged NAV-based TP of INR 1,158/sh.
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