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Oberoi Realty : Thane project to be key volume driver ahead

ICICIdirect Research 19 Jul 2022 DISCLAIMER

What's Buzzing

Oberoi Realty (ORL) reported strong sales volume growth YoY on a depressed base albeit relatively soft sequentially.

Context

ORL sold ~ 4.01 lakh sq ft area during Q1FY23, up 3.6x YoY (with total booking value of Rs 761 crore). On a QoQ basis, sales volume has declined 23% with Worli project volumes not taking off and sequential softness in Borivali/Mulund volumes. On the financial front, reported revenues grew 221.2% YoY (up 10.9% QoQ) to Rs 913.1 crore led by residential segment revenue recognition, which was at Rs 772.5 crore, up 265.5% YoY (up 17.8% QoQ). Reported PAT was at Rs 403.1 crore, up 400% YoY, given strong operating profit growth and higher profit from share of JV

 Our Perspective

The company is looking to launch a new project in Thane during the festive season (Q2FY23 end). Additionally, the management is planning to launch the subsequent phase of Borivali/Goregaon in H2FY23, given the lower available inventory now in these locations. On a healthy base of 2.1 msf sales volume in FY22, we bake 2.6 msf, 3.1 msf volumes in FY23E, and FY24E respectively, with Borivali, Thane, Goregaon volume traction driving the same along with a pick-up in Worli. We believe that further value accretion will be seen once the new foray into non-MMR and society redevelopment projects are seen (awaited for a long time) and incorporated in NAV. Pick-up in Worli, which has remained muted, also remains a key monitorable, going ahead.

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