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MOSL: OBEROI REALTY- (Buy) -Annual Report-Focused on driving volume and value growth

OBEROI REALTY | Annual Report: Focused on driving volume and value growth

(OBER IN, Mkt Cap USD1.9b, CMP INR377, TP INR568, 51% Upside, Buy)

 

We analyzed Oberoi Realty's FY18 Annual Report and key takeaways are:

• Performance highlights: On a consolidated basis, revenue from operations increased 14% YoY to INR12.7b in FY18 from INR11.1b in FY17, primarily driven by growth from projects (+14% YoY) and rent (+21% YoY) - together these two segments accounted for about 86% of the revenues. Consolidated EBITDA increased 19% to INR6.8b in FY18 from INR5.7b in FY17, along with margin improvement to 53% in FY18 from 51% in FY17. Oberoi Realty (OBER) sold nearly 3,22,563 sq.ft. RERA carpet area in FY18 as compared to approximately 3,06,225 sq.ft. RERA carpet area in FY17.
• Negative CFO on account of Thane land acquisition as of March 2018: OBER recorded negative cash flow from operating activities (CFO) of INR2b as at 31 March 2018, due to increased loans and advances (which were to a certain extent offset by increased other liabilities). The advances to vendors increased from INR3.8b in FY17 to INR9.6b in FY18-primarily due to advances and transaction related expenses towards the land acquired in Thane. For a consideration of INR5.6b, OBER acquired the 60-acre land in Thane from GSK Pharma. It is currently pending regulatory and compliance approvals. Moreover, it is actively scouting for land parcels in the National Capital Region (NCR) and Bangalore among other metro cities.