MOSL: OBEROI REALTY (Buy) - Set to get taller, new launch pipeline robust
OBEROI REALTY: Set to get taller, new launch pipeline robust
(OBER IN, Mkt Cap USD2.6b, CMP INR514, TP INR650, 26% Upside, Buy)
We interacted with Oberoi Realty’s (OBER) senior management to understand the progress on the execution of its projects, launch pipeline and the ongoing trends in the industry.
- OBER is set to launch the following two new projects around Diwali this year. Encouragingly, these projects will likely help the company to double its volumes in FY20, in our view.
- Thane: The company has completed land acquisition at Thane (INR8.9b, including approval costs for 60 acre land parcel) with development potential of ~10-12msf. Of this, ~2.5msf is likely to be allocated to the affordable housing (AFH) category, which will be eligible for tax benefits u/s 80IB provided it receives the necessary approvals before Sep’19. Management is confident about obtaining these approvals within the stipulated timeline.
- Goregaon: Exquisite III (1.8msf) project is scheduled for roll out by Oct’19.
- Companies such as OBER stand to benefit from Thane’s relatively strong appetite for brands. Notably, this region clocked sales of ~35msf in CY18 compared to ~27msf in Mumbai. Also, Thane offers a unique value proposition and the new project launches there will likely substantially boost the sales velocity.
Oberoi Realty is a real estate development company operating in Mumbai, focused on premium developments. Co.'s main focus is residential projects but they also have a diversified portfolio of projects covering segments of the real estate market, which target the upper end of the respective income or market segment. Co.'s operating investments comprise the Oberoi Mall, Commerz (commercial tower), Oberoi International School (social infrastructure) and The Westin Mumbai Garden City (269- keys five-star hospitality property).
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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