Oberoi Realty Q1FY16 PAT up 24% y-o-y but down 23% q-o-q. The ebitda margins came in at 61.6% (up 4.8 pts on y-o-y and 9.2pts on q-o-q basis) while net profit margins stood at 36.9% (up 1.5pts y-o-y basis and 7.4pts q-o-q basis).
The company is actively looking to acquire new land for future growth. There are a lot of deals in the pipeline and it believes substantial land will be available in next six months at reasonable prices. The company also received the Occupancy Certificate (OC) for Exquisite during the quarter and it targets to sell off this whole inventory within FY16. Esquire is now likely to come for revenue recognition by Q3FY16 (vs previous expectation of Q1FY16). For the Mulund project, Construction Commencement Certificate (CC) for Eternia has been received while that for Enigma is expected within a month. The Worli project show apartment is likely to be ready by November after which it will be launched. The approval for additional FSI for the project is currently under progress. The Borivali project is also expected to be launched late in the current quarter.
We maintain hold. Oberoi’s current presence is limited to Mumbai. While we continue to remain negative on this market, as inventory levels remain high with more than 40 months, Oberoi’s project command premium, and better offtake.
