Oberoi Realty Ltd. share price target

With a 2% upside from the CMP, we change our rating from BUY to HOLD on the stock.

Oberoi Realty (OBER), a leader in the luxury segment, recently launched Elysian Tower D in 1QFY26 following the launch of its highly anticipated Thane project in FY25, which received a strong response.

Oberoi Realty demonstrated moderate financial performance but exhibits optimistic outlook, driven by its strong launch pipeline, which is expected to drive growth and revenue visibility over the next few quarters. The company's ready inventory *over or under performance to benchmark index provides strong cash flow visibility, reducing dependence on new launches and ensuring a stable financial performance. Further, the sustained performance of Three Sixty West, with consistent sales at premium prices, is a testament to the company's ability to deliver high-quality projects. With a robust development...

With a 15% upside from the CMP, we maintain our long-term BUY rating on the stock.

Oberoi Realty’s (OBER) pre-sales grew 144% YoY to INR19.2b (13% lower than estimate) in 3QFY25, driven by lofty bookings at newly launched project ‘Jardin’ at Oberoi Garden City, Thane, which contributed INR13.3b to pre-sales (70% of 3QFY25 bookings) across bookings of 466 units.

With a 38% upside from the CMP, we maintain our long-term BUY rating on the stock.

We value the company using the DCF method and arrive at a target price of Rs 2,560/share, implying an upside of 21% from the CMP.

Scaling New Heights in Real Estate

Oberoi Realty’s (OBER) pre-sales grew 49% YoY to INR14.4b (80% above estimate) in 2QFY25, driven by strong bookings at ‘360-West’ project in Worli, which contributed INR6.6b to pre-sales across bookings of six units.

Oberoi Realty’s (OBER’s) pre-sales more than doubled YoY (12% above estimate) to INR10.7b

Oberoi Realty (OBER) reported healthy Q2FY24 sales bookings of INR9.7bn with 4 units worth INR3.2bn being sold in 360 West, Worli, INR2.8bn in Sky City, Borivali and pickup in Eternia/Enigma completed Mulund projects which clocked INR2.1bn of sales bookings. H2FY24 is all set to see heavy launches with both Thane projects (Pokhran and Kolshet) set to be finally launched, along with a new tower at Elysian, Goregaon and completed Worli/Mulund/Borivali inventory.

Oberoi Realty (OBER) reported muted Q1FY24 sales bookings of INR4.8bn with nil sales in 360 West, Worli and no new launches during the quarter. However, the balance of FY24E is all set to see heavy launches with both Thane launches (Pokhran and Kolshet) set to be finally launched, along with a new tower at Elysian, Goregaon and completed Worli/Mulund/Borivali inventory.

FY23 was a year of consolidation for Oberoi Realty (OBER) as it focused on, a) completion of purchase of 50% of residual inventory in its 360 West, Worli project from Oasis Realty, the JV entity where it held 32.5% stake, for Rs34bn, b) seeking fresh approvals for its two upcoming Thane projects (Pokhran and Kolshet) under the unified DCPR.