HDFC Securities Places Buy Call On Midcap Real Estate Stock, Sees 32% Robust Upside

HDFC Securities initiates a Buy on Oberoi Realty Ltd. with a target price of Rs. 1158/share. The brokerage claims a potential upside of 32% from its current level if purchased at the Current Market Price (CMP). It is a Midcap company with a market valuation of Rs. 32,362.42 crore.

Oberoi Realty is a real estate development company, headquartered in Mumbai. It is part of Oberoi Realty Group, focused on developments in the residential, retail, office space, hospitality, and social infrastructure verticals.

New launches to drive rerating

According to the brokerage firm, Oberoi Realty (ORL) registered presales of INR 25.5bn (including 360W INR 18.7bn under Oasis, +176% YoY). ORL has a strong launch pipeline for FY24, with a new tower expected to open up in Goregaon and a project launch in Thane (Pokhran and Kolshet) that is expected by Q3/Q4FY24 (3-4msf in Phase 1). Commerz 3 and Borivali Mall are expected to start operation by Mar/Jun'24 resp., with rental potential of INR c.5bn in Commerz 3 and INR c.3.5bn in the mall. The gross debt inched up to INR 39bn (INR 30bn in Dec'22), mainly to finance the unit sale transaction with Oasis Realty. "Whilst the results seemed a bit tepid, we believe ORL will generate robust cash flows from ready-to-movein inventory in the 360W and Mulund projects. Besides new business development outside MMR shall aid further rerating. We remain constructive on ORL and maintain BUY, with an unchanged NAV-based TP of INR 1,158/sh," the brokerage said.

Stock Overview, Current Market Price & Performance

The stock on NSE last traded at Rs. 890.05/share, down 2.72% from its previous close of Rs. 914.90/share. The stock hit its 52 week high on 15 September 2022 at Rs. 1088.95/share and 52 week low on 20 June 2022 at Rs. 725.95/share, respectively.

The stock has fallen 6.28% in the past 1 week, and 3.64% in 1 month, respectively. It gained 8.66% in 1 year, 196.73% in 3 years and 69.63% in 5 years, respectively.

Disclaimer - The stock has been picked from the brokerage report of HDFC Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.