New launch pipeline, rental portfolio to boost Oberoi Realty's FY26 growth

The company reported pre-sales of Rs 1,299 crore for the September quarter, which was down 10 per cent year-on-year (Y-o-Y) due to a higher base last year

Though the second quarter of the financial year 2026 (Q2FY26) did not see any major launches, Oberoi Realty posted healthy pre-sales or bookings during the period. Most of the sales for the realty major came from existing projects.

 

The company’s large annuity assets have also ramped well and are generating a steady revenue source. While the second quarter pre-sales did not see an uptick from new launches, the project pipeline remains strong and there could be a pick-up in the second half of FY26.

 

The company reported pre-sales of ₹1,299 crore for the second quarter and this was down 10 per cent year-on-year (Y-o-Y) due to a higher base last year. The bookings were led by existing projects Elysian and Three Sixty West, which accounted for 62 per cent of total pre-sales.

 

Volumes were down 9 per cent Y-o-Y and a sharp 29 per cent quarter-on-quarter (Q-o-Q) to 0.25 million square feet which was much lower than estimates. Volumes stood at 0.6 million square feet in the first half of FY26 up 24 per cent Y-o-Y. Total units booked in the quarter stood at 158, which was flat Y-o-Y and down 13 per cent Q-o-Q.

 

For H1FY26, there were bookings of 339 units and this was up 14 per cent Y-o-Y.

 

The company’s performance in the quarter beat JM Financial Research’s estimates. The Q2 show was led by ₹440 crore worth of sales at its uber luxury project, Three Sixty West. Oberoi also witnessed healthy traction at Elysian, which recorded bookings of ₹350 crore, up 10 per cent Y-o-Y.

 

Analysts led by Sumit Kumar of the brokerage point out that the Sky City project has witnessed sharp uptick in pricing over the last two quarters aided by opening of the retail mall and the upcoming upscale hotel. The realisation for the residential project has now crossed ₹50,000 per square feet, which is 34 per cent higher than average pricing of FY25. 

 

The annuity portfolio reported a healthy 47 per cent Y-o-Y revenue growth to ₹280 crore with an operating profit margin of 92 per cent. While occupancies at office project Commerz-1 and 2 were stable at 96 per cent, Commerz-3 occupancy increased to 87 per cent from 83 per cent Q-o-Q leading to a revenue growth of 38 per cent Y-o-Y to ₹130 crore.

 

This took the total office revenue to ₹180 crore. On the retail asset front, Oberoi Mall (99 per cent occupied) delivered a 7 per cent Y-o-Y increase in revenues to ₹52 crore while Sky City Mall (53 per cent occupied) reported a revenue of ₹45.2 crore.

 

In the hotel segment, The Westin hotel witnessed a 2 per cent Y-o-Y growth in revenue to ₹44.6 crore, although there was a 9 per cent Y-o-Y increase in average room rate of ₹13,735. Occupancy at the hotel was 80 per cent in the quarter, down from 82 per cent in the year ago quarter and 72 per cent Q-o-Q.

 

ICICI Securities has an unchanged rating of buy with a target price of ₹2,100. The stock has seen a correction of 15 per cent over trailing four months on account of expectations of slower sustenance sales continuing from previous trailing two quarters.

 

Ronald Siyoni and Dilip Pandey of the brokerage, however, point out that the company witnessed a strong uptick in sustenance sales despite undertaking price hikes in select projects. The brokerage expects key project launches over FY26-27 to drive pre-sales growth momentum.

 

Motilal Oswal Research has a neutral rating on the stock. The brokerage believes that Oberoi’s current valuation does not suggest significant near-term gains. However, it expects a strong 24 per cent annual growth in its presales over FY25-28.

 

Abhishek Lodhiya and Yohan Batliwala of the brokerage believe that the key to a future re-rating lies in the company’s ability to reinvest the substantial cash flow derived from its completed and near-completion projects.

 

JM Financial Research has maintained an add rating. It expects a 21 per cent growth in bookings in FY26 led by a strong launch pipeline for the next few quarters. On the commercial side, given the recent ramp-up, it has revised its annuity assumptions and increased its target price to ₹1,850.