ORL delivered a strong 1QFY17 beat, with revenue 36.2% ahead of estimates. Higher POCM contribution from Esquire and Prisma resulted in outperformance. ORL spent ~Rs 1bn of FSI between the two projects. 1QFY17 Pre-sales of ~0.15mn sqft was driven by Worli project (Three Sixty West) which clocked 55,320sqft in presale and Rs 2.4bn in pre-sale value. Pre-sale was muted in Exquisite, Esquire and Mulund projects. We look forward to stronger 2HFY17E as festive demand pick up along with Goregaon Phase 3 launch (~1.6 mn sqft).

Valuation: They have adopted the DCF methodology to arrive at ORL’s NAV. They value the residential real estate business at Rs 209/sh, hotels at Rs 25/sh, commercial annuity assets at Rs 110/sh, social infrastructure at Rs 9/sh, other assets at Rs 37/sh and net debt at Rs 9/sh to arrive at the total SoTP valuation of Rs 381/sh.Maintain BUY.