Buy Oberoi Realty; target of Rs 2100: Prabhudas Lilladher

Moneycontrol • 11 days ago

Original source

Key Investment Pillars

  • Strong pre-sales growth: Oberoi Realty's pre-sales improved significantly by ~604% YoY to INR91.5bn, led by the strong response to the newly launched 360 North project in Gurugram.
  • Robust launch pipeline: The company has a strong launch pipeline for H2FY27, including key planned launches such as Aurelis, Tower A at Jardin, an additional tower at Forestville, Alibaug, and a few redevelopment projects.
  • Steady annuity income: Oberoi Realty's annuity income is expected to remain steady at INR13-14bn by FY28E, providing strong cash flow visibility.
  • Improving margins: The company's EBITDA margins expanded despite revenue decline, with a margin improvement of ~360bps YoY and ~460bps QoQ.

Thesis Validation Checklist

To validate the investment thesis, investors should watch for the following signals over the next ~12 months:

  • Pre-sales growth: Continued strong pre-sales growth, particularly from the 360 North project and other upcoming launches.
  • Launch pipeline execution: Successful execution of the launch pipeline, with a focus on timely project completion and strong sales velocity.
  • Annuity income stability: Steady annuity income from the company's commercial and hospitality portfolio, with a focus on maintaining high occupancy levels and stable rents.
  • Margin expansion: Continued improvement in EBITDA margins, driven by operating leverage and cost discipline.