Company Update : Oberoi Realty by Motilal Oswal Financial Services Ltd
In-line presales, but weak collections hit revenue
Operational performance
* In 1QFY26, the company achieved pre-sales of INR16.4b, up 56% YoY and 92% QoQ (in line with our estimates). This was supported by the launch of Elysian Towed D during the quarter.
* Total units booked in the quarter stood at 181, up 30%/132% YoY/QoQ.
* The overall annuity portfolio posted a 70% YoY increase in revenue to INR2.6b, with an EBITDA margin of 92%.
* Office: Commerz-I and II occupancy was stable at 96%. Following the Commerz-3 augmentation in 1QFY25, occupancy inched up to 83% in 1QFY26 from 54% in 1QFY25, resulting in an 88% YoY revenue growth to INR1.2b. This brought the total office revenue to INR1.7b (+60% YoY), leading to an EBITDA margin of 91%.
* Retail: Oberoi Mall delivered an 8% YoY increase in revenue to INR507m, with an EBITDA margin of 96%, while the newly opened Sky City Mall delivered revenue of INR404m, with an EBITDA margin of 89%. Oberoi Mall was 99% occupied, while Sky City was 50% occupied.
* Hospitality: In 1QFY26, The Westin Hotel reported flat revenue growth YoY at INR426m, despite a 22% YoY increase in ARR to INR14,858. This was due to a decline in occupancy to 72% during the quarter, from 83% YoY and 79% QoQ. EBITDA came in at INR160m, recording a margin of 38%.
* Interim dividend declared for 1QFY26 stood at INR2/share, i.e. 20% of the face value.
* The private equity transaction in I-Ven Realty Limited has been completed, with the joint venture entity receiving an investment of INR12.5b.
* Oberoi Realty, along with Shree Naman Developers and JM Financial, has been selected as the successful bidder for Hotel Horizon Pvt Ltd’s (HHPL) insolvency process. The consortium’s resolution plan, involving an INR9.2b settlement, was approved by HHPL’s creditors on July 14th, 2025. The plan includes acquiring ~0.08msf of sea-facing land in Juhu, Mumbai, and will be executed either directly or via a new SPV, subject to NCLT and other regulatory approvals. The SPV will subscribe to INR10m of fresh shares of HHPL for a 100% ownership of HHPL.
Cash flow performance
* Collections stood at INR10b, down 1% YoY and up 30% QoQ (42% below our estimates).
* Net debt to equity during the quarter stood at 0.01x (flat vs. 4QFY25).
P&L highlights
* In 1QFY26, revenue declined 30%/14% YoY/QoQ to INR9.9b (31% below estimates).
* The company reported an EBITDA of INR5.2b, down 36%/16% YoY/QoQ (39% below estimates), with a margin contraction of 5.3% YoY to 53%.
* Consequently, PAT declined 28%/3% YoY/QoQ to INR4.2b, which was 30% below our estimates.
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