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Our view

Oberoi Realty (OBER) reported the pre-sales of 0.45msf translating to Rs17.6bn of which 78% was contributed by the Elysian and Sky City for Q4FY24. Management is confident to monetize 360 West projects in the next 2years with better realization. Pokhran, Thane project will be launched in festival season. Commerz-III has received OC and rentals to start from Q1FY25 while soft launch and rental of Borivali mall to start from Q3FY25. Post stabilization of Commerz-III, Borivali Mall and Hotel the annuity income should surpass the annual run rate of Rs17bn. For Q4FY24, Oberoi Mall/ Commerz/ Commerz-II reported revenue of Rs465mn/77mn/333mn with operating margin of 92%/87%/93% respectively with steady occupancy and rental rate. The Westin achieved Rs485mn revenue for Q4FY24 with the EBITDA margin of 43% and RevPAR of Rs12,348 backed by strong ARR of Rs14,810/night/room. Management showed intent to prudently utilize cash generated from projects on business development and acquire projects of larger scale. As all the residential projects are CF positive and 0.09x gearing, we believe with sustenance of strong demand for larger houses, new launches to do well on the back of quality product and delivery track record. We maintain a premium of 25% on the current portfolio & arrived at SoTP based 1year forward NAV of Rs1700/share with ‘NEUTRAL’ rating.

Result Highlights:

* Residential: Oberoi Realty achieved pre-sales of 0.45msf which translates in presales value of Rs17.6bn guided by the sales in Elysian (107units) and Sky City (53units). These two projects contributed 78% to the pre-sales booking area and 75% in value terms. For FY24 achieved presales of Rs39.5bn (1.1msf).

* In separate disclosure OBER disclosed, signing of development agreement to development of land admeasuring ~12,790sqm, situated at Adarsh Nagar, Worli. The said land to generate a free sale component of ~0.624msf (RERA carpet area).

* OBER maintained its strong collection momentum and achieved Rs10.8bn for Q4FY24 and for FY24 collected Rs40.2bn as the company has high RTM inventory in Mulund and near completion inventory in Sky City project.

* Reported Revenue of Rs13.15bn (24.8% q/q & 36.8% y/y) due to higher collections from completed projects. 82% of revenue is contributed by residential real estate. For FY24, reported revenue of Rs44.9bn (7.2% y/y).

* EBITDA came at Rs7.89bn (54.8 q/q & 113.9% y/y) and margin was at 60% (1163bps q/q & 2163bps y/y) due to the recognition of high margin projects. For FY24, reported EBITDA of Rs24.1bn (14.1% y/y) with 53.6% margin (324bps y/y).

* Reported PAT of Rs7.88bn (118.8% q/q & 64.1% y/y) with the profit margin of 59.9% (2576bps q/q & 998bps y/y). For F24, reported PAT at Rs19.3bn (1.2% y/y)

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