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Business Operation Oberoi Realty, based in Mumbai, specializes in premium developments in residential, office space, retail, hospitality, and social infrastructure. They have a strong track record with over 42 completed projects, totaling 11.89 million sq. ft. They also have plans for an additional 45.31 million sq. ft. in Mumbai and beyond. Investment Rationale A. New Projects to Kick in Growth For Q3 And Q4FY24. Oberoi Realty Management is confident in launching new projects. Out of the two Thane projects, Kolshet and Pokhran, the launch of Kolshet is scheduled for after Diwali, with Pokhran following in the next quarter, both within this fiscal year. The company anticipates its rental income to surge from the current Rs. 350 crore per annum to a four-digit figure after the completion of Sky City Mall (Borivali) and Commerz III. Furthermore, the company foresees a continued positive sales trend in its Mulund projects and aims to sell off its entire inventory in the next two years. B. Sectoral Tailwinds to Benefit Oberoi Realty. Oberoi Realty holds a substantial Rs. 17,000 crore unsold residential inventory, capitalizing on rising MMR housing demand. Upcoming retail, office, and hotel projects are set to contribute revenue by FY2024. Occupancy growth and new developments expected to boost rental income threefold by FY2025. The company's solid financial position and potential for value creation through redevelopment and annuity assets provide a promising outlook. C. Health performance in Q2FY24 Underscores Momentum. In Q2FY2024, Oberoi Realty reported robust residential sales with bookings of Rs. 965 crore, up 103% sequentially. This strong performance drove a 77% YoY increase in consolidated revenues and a 52.4% operating profit margin. The company's consolidated net profit reached Rs. 457 crore, up 43% YoY and 42% sequentially. Company is optimistic about continuing this momentum in sales and has upcoming project launches in the pipeline, including Thane projects and the launch of Borivali Mall and operationalizing Commerz III office. D. Outlook And Recommendation. Given the traction for MMR housing market, we estimate a Revenue/PAT CAGR of 15%/13.2%, OBEROI REALTY is trading at forward PER (x) of 17.3 and we value it with 20.5(x) FY25E and Recommend BUY on OBEROIRLTY with Target Price of Rs. 1476

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