Buy This Realty Stock For 30% Returns, 221% Revenue Climbed 221% YoY: Motilal Oswal

Brokerage firm Motilal Oswal suggests buying the stocks of Oberoi Realty. The company's revenue increased 221% YoY to Rs. 9.1b (inline) on a low base and EBITDA increased 294% YoY to Rs. 4.9b.

Stock To Buy: Target Price, Current Market Price

The Current Market Price (CMP) of Oberoi Realty is Rs. 849. Motilal Oswal has estimated a Target Price for the stock at Rs. 1100. This stock has the potential to give a 30% return, in the upcoming 1 year. This is a large-cap stock with a market capitalization of around Rs. 31,162 crore.

Stock Outlook
Current Market Price (CMP)	Rs. 849
Target Price	Rs. 1100
Potential 1 year return	30.00%
52 week high share price	Rs. 1,051.90
52 week low share price	Rs. 643.45

Reported EBITDA margin expanded 1,000bp to ~54% as Oberoi Realty commenced revenue recognition at Elysian tower A. The company also reported a profit of Rs. 0.45b from its JV project 360 West, which received the occupation certificate (OC) during the quarter. This resulted in 4x YoY surge in its overall PAT to Rs. 4b in 1QFY23.

Stock advantages and risks: Motilal Oswal

The firm said that the company has experienced steady pre-sales and a significant uptick in hospitality assets.

Commenting on the stock, Motilal Oswal said, "Oberoi Realty delivered a steady 1QFY23 performance in terms of bookings, which stood at Rs. 7.6b (down 18% QoQ but up 348% YoY). Sales volume was at 0.4msf in 1QFY23 v/s 0.52msf/0.09msf in 4QFY22/1QFY22, respectively. The company reported bookings of 164 units during the quarter driven by steady sales across projects. The traction at Elysian (Goregaon, Mumbai) and Eternia (Mulund, Mumbai) remained strong as these projects clocked bookings of 39 and 30 units, respectively. Additionally, its rental revenue from two commercial towers stood at Rs. 0.35b (v/s Rs. 0.4b in 1QFY22), and the retail mall recorded an income of Rs. 0.38b. Leasing EBITDA grew 73% YoY to Rs. 0.6b, with a margin of 92%."

Company profile: Oberoi Realty

Over the past 3 decades, the company has developed over 42 projects at strategic locations across the Mumbai skyline aggregating about 11.89 million sq. ft of spaces (group entity including promoter group). With another 48.68 million sq. ft. in the making, we have aggressive plans for upcoming projects in various parts of Mumbai and other regions. The company has footfalls in the Residential, Commercial, Retail, Social Infrastructure, and Hospitality sectors.

This quarter, the Hospitality segment of Oberoi Realty saw a steep recovery in occupancy (91% v/s 75% in 4QFY22) and ARR (+94% YoY). Revenue stood at Rs. 348m, while EBITDA was at Rs. 136m (v/s Rs. 56m in 4QFY22).

Disclaimer

The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.