The past six months have seen sweeping changes in the real estate industry. The implementation of the Real Estate (Regulation and Development) Act, 2016, or RERA, and scarce liquidity in the realty market after demonetization had resulted in low expectations from investors for the September quarter.

Against the backdrop of this uncertainty, Oberoi Realty Ltd put up a robust show, beating Bloomberg’s consensus on all fronts. The 20% year-on-year (y-o-y) growth in revenue was a pleasant surprise as it was 10% more than estimates. But this was driven only by strong sales in a couple of its Mumbai suburban projects. The firm gained compared with peers as Maharashtra was among the first to kick off RERA registrations—now mandatory for property sales in the country.

Still, the overall quarterly collections were only half the quarterly average run rate as compliance with new RERA rules and documentation in the new formats took time.

That apart, another area that lifted revenue was the 25% y-o-y rise in rental income from its commercial assets such as malls. Oberoi’s malls registered a rise in both occupancy rates and rental income, both on a y-o-y and quarter-on-quarter (q-o-q) basis, given the location advantage of most of its assets.

However, the hospitality segment and property management services continued to stagnate, with revenue remaining at year-ago levels. Fortunately, these two segments are not material enough to impact profitability. In fact, September quarter’s operating margin improved by 400 basis points y-o-y to 54% as the firm contained overall costs. Like with revenue, the firm surpassed forecasts on this front as well. Analysts had assumed that festive discounts and cost overruns in existing projects could adversely affect profitability.

Meanwhile, the plum acquisition of 63 acres of land in Thane from Glaxo Smithkline Pharmaceuticals Ltd in end-September has already triggered a rally in the stock price. A report by ICICI Securities says it would take about eight to 10 years for the firm to monetize all the land, assuming that the clearances are obtained in the next 12 months.

It remains to be seen whether Oberoi would sail through this development comfortably, given that the Thane belt already has large construction activity and supply. Unless the market picks up, the huge inventory in the residential market may be a deterrent to revenue accretion from this project.

That said, Oberoi’s balance sheet is on a more comfortable wicket than its peers in the listed universe, with a debt-to-equity ratio of 0.19 which can accommodate expansions easily. The rental mix in its revenue also helps in terms of predictable cash flows.

The healthy revenue mix gives Oberoi a stronger foothold, compared with some other listed firms such as DLF Ltd and Sobha Developers Ltd that rely largely on home sales for revenue growth. A Crisil Research report highlights that the residential property market is unlikely to revive for the next 12-18 months due to multiple reasons such as high prices in key metros, job losses and turmoil in the information technology sector —which is a key end-user in home sales—and falling interest in real estate as an asset-class.

Despite Oberoi’s relative advantage over peers, investor sentiment towards the stock would be influenced by overall inventory of homes in the premium segment, where Oberoi is formidable. Launch of commercial assets, given growing demand, could be another key driver of stock price. As things stand, at Rs460 per share, most analysts believe the stock price which is twice the book value factors in recovery in home sales and also the recent Thane land acquisition.