Oberoi Realty Ltd. share price target

We maintain BUY with a TP of Rs 552/sh. After an impressive 1QFY19, ORL posted strong growth in certain pockets (Borivali /Worli) leading to 0.2mnsqft of sales vs (0.3mnsqft QoQ). Revenue came in at Rs 5.9bn in 2QFY19 (lower by Rs 1.1bn due to IND AS 115). During 2QFY19 Eternia project reached the profit recognition threshold while Enigma is pending. APAT came in at Rs 2.1bn in 2QFY19 (lower by Rs 78.6mn due to IND AS 115).

23 October 2018 OBERs sales volumes grew 38% YoY to 2,38,634 sq. ft. while sales value increased 61% YoY to INR5.7b in 2QFY19. Overall collections jumped over 300% YoY to INR5.6b. We expect OBER to deliver revenue/EBITDA/PAT growth of 62%/52%/44% in 2HFY19. Commerz II is expected to achieve ~97% occupancy over the next two quarters, as against 63% in 2QFY19. The company has maintained the rental agreement rates at Commerce II in a move to retain quality tenants and tie-up sales. Oberoi Mall average rentals, however, increased by 6% from INR220 per sq. per month in 1QFY19 to INR233 in 2QFY19. Separately, Commerz III construction is expected to commence soon. (a) Exquisite phase III and Sky City Tower 5 will be launched as scheduled this year.

Steady Operations; well placed in current environment Oberoi reported steady operations with pre-sales value at INR 5.7bn (INR 3.5bn 2QFY18) primarily on improvement in pre-sales across projects. Oberoi recognised Eternia revenues in 2QFY19 as project crossed 25% construction threshold. While company's performance continues to improve post RERA/GST implementation, Mulund projects remain slow moving. Collections remained stable at INR 5.6bn (INR 5.7bn in 1QFY19). Net debt was reported at INR 4.1bn. Operating cash flows declined on TDR payments and higher construction spends. Company has received 97% lease commitment in Commerz II (63% at present). We believe...

ICICI Securities Ltd | Retail Equity Research Oberoi Realty's (ORL) sales volumes jumped 118.3% sequentially to 2.86 lakh sq ft (our estimate: 1.65 lakh sq ft) clocking sales value of | 166.4 crore. Higher-than-expected sales volume of 1.29 lakh sq ft in Esquire' project (our estimate: 50000 sq ft) primarily led this growth Revenues grew robustly by 239.0% YoY to | 884.0 crore (our estimate: | 818.7) crore as SkyCity project (Borivali) hit revenue recognition threshold during the quarter...

With recent price correction we upgrade ORL to BUY from NEU with Rs 598/sh TP. We continue to assign a NAV premium of 30% to capture terminal value. After a muted 4QFY18, ORL had an impressive start to FY19 clocking in 0.3mn sqft in pre-sales and Rs 6.2bn in sales value. Revenue came in at Rs 8.9bn in 1QFY19 (lower by Rs 11.3bn due to IND AS 115). Since ORLs contracts dont have a termination clause, ORL can continue to follow percentage completion method for revenue recognition.

Revenue grew by 157.49% to Rs. 888.26 Cr in Q1FY19 when compared to the previous quarter. Oberoi Realty Ltd Q1FY19 results Comment

31 July 2018 volumes surged 193% YoY to 2,86,689sf and sales value jumped 117% YoY to INR6.2b in 1QFY19 on account of increased traction across projects, primarily in Esquire and Eternia (run-rate in SkyCity project maintained). Overall collections jumped 458% YoY to INR5.7b. Revenue grew 241% YoY to INR8.8b (est. EBITDA margin was flat at 52% (est. Adj. PAT rose over 200% YoY to INR3.1b (est. of INR3.3b), driven by revenue growth.

4 July 2018 Real Estate Customers response to the subvention scheme launched in April for Esquire and Exquisite projects (OC received) at Goregaon has been encouraging. The scheme allows customer to move in after paying 25% booking amount the balance can be paid in equal installments over three years. With OC received and subvention scheme launched, the number of units sold is likely to be far better in FY19. Customers can move in after upfront payment of 25% of the booking value, with the balance 75% payment equally spread over three years. We believe OBERs subvention scheme will help increase volumes in the high- ticket-size category. OBER is likely to launch 2.5msf around Diwali this year, eligible under the affordable housing scheme, which provides corporate tax exemption (MAT applicable). The company intends to pass on the benefits to customers and keep ticket size lower at ~INR12m.

Oberoi Realty is a real estate developer based in Mumbai, having a market capitalization of INR17,353.67 Cr.

Strategic shift towards achieving sales through deferred payment programs & creating cash reserves for land acquisition is key monitor able. We continue to maintain our positive outlook on OBER's given its quality of land bank, management bandwidth to execute large projects and healthy balance sheet....