IGI Logo

* Oberoi Realty (OBER) reported sales bookings of INR6.7b (in line with our estimate of INR7b), which was down 27% YoY, due to the absence of any major launches and a drop in sales velocity across projects in Borivali, Goregaon, and Mulund (Enigma). Total units sold were down to 107 from 234 in 4QFY22.

* After a muted performance in 3QFY23, sales at Elysian, Goregaon, have shown signs of recovery, with reported bookings of 12 units. Additionally, OBER sold three units in 360-west, Worli, from its own inventory, following a settlement with its JV partner. ? Collections were down 10% YoY, but doubled QoQ to INR8.5b, as the company started handing over units in Mulund projects. Mismatch in timing of stamp duty and tax payments with regards to transfer of units in 360- west led to an increase in net debt by INR6b to INR31b. However, D/E remained flat at 0.25x, due to a rise in equity, led by recognition of profits from the transaction.

* P&L performance - Revenue increased 17% YoY to INR9.6b (6% below estimate), due to recognition of sales from 360-west, Worli, which contributed 24% to revenue. Recognition of costs from new tower in Skycity, Borivali, and increase in opex led to a 500bp-decline in EBITDA margin to 38%. Thus, EBITDA growth was restricted at 5% YoY to INR3.7b (25% below estimate). PAT more than doubled YoY to INR4.8b, due to recognition of deferred tax benefit of INR1.8b.

Momentum in Hospitality sustained; commercial performance steady

* The Hospitality segment maintained its robust performance as The Westin, Mumbai, reported its highest-ever ARR of over INR13,700, up 11% QoQ and clocked an occupancy of 84% (v/s 80% in 3Q). Revenue increased 10% QoQ to INR461m. EBITDA, however, increased 32% QoQ to INR208m, due to a 740bp increase in margin to 45%.

* Blended occupancy in commercial portfolio declined 100bp as trading occupancy at the mall declined 13%YoY with ~45,000sqft being re-modeled. However, this was offset by a 700bp increase in occupancy at Commerz II. Rental revenue was flat at INR735m. EBITDA margin declined 400bp, which led to a 4% decline in EBITDA to INR665m.

Key management commentary

* New Launches: The company has taken approvals under the new DCPR for both the projects in Thane. The Experience centre, including a show flat, is completed at both the sites and the company is gearing up for the launch of Kolshet road project in 2QFY24.

* OBER’s larger project at Pokhran road is expected to be launched in 2Q/3QFY24. Lastly, the management is also targeting to launch another tower at Goregaon during the festive season of FY24.

To Read Complete Report & Disclaimer Click Here

For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412

Above views are of the author and not of the website kindly read disclaimer