ICICIdirect.com's report on Oberoi Realty
Oberoi Realty (ORL) reported consolidated net sales of Rs 208.3 crore (20.6% YoY growth) below our expectation of Rs 233.1 crore as revenues from development properties came in lower at Rs 125.3 crore vs. our expectation of Rs 154.1 crore
The EBITDA margin improved 530 bps to 60.6% vs. our expectation of 58%
Sales volumes came in at 80,635 sq ft way below our expectation of 1.98 lakh sq ft as sales volumes from the Mulund project were muted at 14,100 sq ft in Q1FY16. On the positive side, its ready to move project (Oberoi Exquisite) witnessed 49,075 sq ft sales in Goregaon
"ORL is our top pick in the real estate sector given the quality of the land bank, healthy balance sheet, management bandwidth to execute projects and anticipated pick-up in sales volume with new launches such as Mulund, Borivali and Worli. We maintain our BUY recommendation with a target price of Rs 333/share. We also highlight that we have now factored in the recent QIP of Rs 324.5 crore, which led to equity dilution of ~3.4% in our valuation. Key risks are a further delay in launches and lower than expected sales volumes", says ICICIdirect.com research report.
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