Add Oberoi Realty Ltd For Target Rs.1,005 - Yes Securities
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Superlative performance of Elysian steals show
Our view
OBER has achieved all-time best nine months gross presales of Rs31.5bn guided by strong demand across project while Elysian received extraordinary response since launch along with Sky City. Borivali & Goregaon project is in last leg of development so it is expected that OBER is actively scouting for land to build pipeline for next 5- 10years. We believe once all the covid-19 related restrictions are eased out totally and organization start operating at full strength the demand for the office asset will increase and OBER in Goregaon micro-market is well placed to tap that demand with CommerzIII. Additionally, The Westin’s witnessed decent recovery in Q3FY22 while spread of omicron has delayed the full recovery of Mall. OBER is actively evaluating opportunities in other geographies (tentatively NCR) and for society redevelopment too. Execution of all the capex projects is running as per commissioning timelines mentioned by the management. We believe with strong demand and consolidation witnessed in sector, better player like OBER will always have upper edge on the back of quality product, delivery track record, D/E of 0.28x and supply side constraint. We continue to give 20% premium to current portfolio for being leader in premium residential segment and arrived at SoTP based NAV of Rs1005/share and maintain ADD rating with 10% upside.
Result Highlights
* OBER clocked presales of 1.04msf (195%q/q & 104%y/y) guided by the superlative performance by Elysian and Sky City (contributed 76%) translates in the sales of Rs19652mn (137%q/q & 102%y/y) and collected Rs9815mn (63%q/q & 19%y/y).
* OBER reported revenue of Rs8320mn (10.3%q/q & 0.4%y/y) guided by the robust collection and improved contribution from annuity assets in Q3FY22.
* EBITDA came in at Rs3316mn (11.1% q/q and 13.3% y/y) and margins compressed by 962bps q/q and 632bps y/y to 39.9% due to higher contribution from the Sky City Borivali and Mulund.
* PAT reported at Rs4675mn (75.4% q/q and 63.1% y/y) guided by the contribution of Rs2353mn from the 360 West resulted in profit margin expansion by 2085bps q/q and 2159bps y/y to 56.2%
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