 "Oberoi Realty")
Mumbai-based real estate developer Oberoi Realty is seeing strong investor interest. The company achieved pre-sales of Rs 1,760 crore in the January-March quarter of the last financial year (Q4FY24), up 160 per cent year-on-year (Y-o-Y), which was in line with optimistic consensus.
In FY24, bookings reached Rs 3,940 crore, up 22 per cent Y-o-Y. The Q4FY24 performance was driven by the new tower at Elysian (at Goregaon in Mumbai), which generated Rs 800 crore of bookings at the launch in January 2024. The company has also got bookings for three units at its ultra-luxury project 360 West (Worli, in Mumbai), with a total value of Rs 220 crore.
Other key projects at Borivali and Mulund are progressing with sales of Rs 220 crore and Rs 190 crore, respectively. A new project in Thane (launched in Q3FY23) generated bookings of Rs 40 crore across 20 units. Collections increased 26 per cent Y-o-Y to Rs 1,080 crore and net debt was reduced by Rs 900 crore to Rs 1,200 crore with an excellent debt/equity ratio of 0.09x. Near-term, the launch pipeline remains strong and Oberoi may report a 41 per cent CAGR in bookings over FY24-26 to Rs 7,900 crore.
The revenue increased 37 per cent Y-o-Y to Rs 1,310 crore in Q4FY24 and Ebitda was at Rs 790 crore, up 114 per cent Y-o-Y with the margin increasing sharply to 60 per cent. The margin improvement was due to higher revenue recognition from Elysian and 360 West. Other Income was up 7x Y-o-Y to Rs 240 crore as the company divested a stake in a joint venture project. However, due to higher taxes, PAT increased only 64 per cent Y-o-Y to Rs 780 crore.
Rentals from office assets increased 11 per cent Y-o-Y (5 per cent quarter-on-quarter or Q-o-Q) to Rs 41 crore, driven by a 600 basis points increase in occupancy at Commerz II. The Oberoi mall registered strong performance with revenue increasing 28 per cent Y-o-Y (5 per cent Q-o-Q) to Rs 46 crore. The Ebitda from the annuity portfolio came in at Rs 80 crore with a blended margin of 92 per cent. In FY24, annuity assets generated revenue and Ebitda of Rs 320 crore and Rs 300 crore, respectively, up 9 per cent Y-o-Y for revenues and 10 per cent Y-o-Y for Ebitda.
The Average Room Rent (ARR) at the Goregaon hotel grew 8 per cent Y-o-Y in Q4FY24, resulting in 5 per cent Y-o-Y growth in revenue to Rs 48.5 crore with steady occupancy of 83 per cent. The Ebitda came in at Rs 20.8 crore with a margin of 43 per cent. In FY24, revenue and Ebitda from the hotel increased 13 per cent and 14 per cent Y-o-Y to Rs 170 crore and Rs 70 crore, respectively and ARR increased 15 per cent Y-o-Y to Rs 12,840.
The management said show apartments at Pokhran road, Thane, are completed, and the project remains on schedule for launch during the festive season (October 24). There are plans to launch a new tower at Borivali and offer inventory on higher floors in Mulund in FY25. The recently acquired projects in Worli (MMR) and Gurugram, and Tardeo (Mumbai), are slated for launch in FY26.
Commerz III is poised for full leasing within the next two quarters. The anchor tenant can acquire 50 per cent of the asset, with rentals commencing April 2024. The Borivali mall is scheduled to be operational by October 2024. These two assets will contribute to rental income growth. The existing portfolio can cumulatively generate Rs 1,500 crore of surplus cash annually. Coupled with higher rental income, this implies strong future prospects. Most analysts have upgraded valuations. However, post-Thursday’s 8.8 per cent surge to Rs 1,713.30, the room for upside may be limited.
According to Bloomberg, five each of the 14 analysts polled post results are either bullish or neutral on the stock; 3 have a sell/reduce rating. Their average one-year target price is Rs 1,525.
