MOSL: OBEROI REALTY (Buy)-Weak operational performance-new launches to drive growth in 2HFY20
OBEROI REALTY: Weak operational performance; new launches to drive growth in 2HFY20
(OBER IN, Mkt Cap USD2.6b, CMP INR513, TP INR630, 23% Upside, Buy)
- Presales volume declines 42% YoY: 2QFY20 sales volumes/value declined 42%/43% YoY to 0.14msf/INR3.2b. Overall collections grew 23% YoY to INR6.9b. Revenue declined 17% YoY to INR4.9b (v/s est. INR5.6b). EBITDA margins contracted 665bp to 43.3% (v/s est. 40.9%).
- 1HFY20 performance: Sales volume/value declined 28%/39% YoY to 0.38msf/INR7.2b. Revenues declined 26% YoY to INR10.9b; EBITDA margins reduced by 1,020bp to 40.9% and PAT declined 45% YoY.
- Leasing business on a strong footing: For 2QFY20, leasing revenue increased 22% YoY to INR807m, driven primarily by increased occupancy of Commerz II Phase I (96.9% v/s 63.4% in 2QFY19). Construction of Commerz III (1.8msf), which is expected to be operationalized by Mar’22, has started. Construction at the Worli site is well on track – plans are afoot to build mall/offices/hotel of 0.8msf/ 0.9msf/0.15msf.
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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