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Oberoi Realty is better placed than Godrej Properties on valuations, says CLSA

Oberoi Realty is one of Mumbai’s largest real estate developers and has developed over 40 projects across the city, aggregating about 11.30 million sq. ft. Photo: Ramesh Pathania/MintPremium
Oberoi Realty is one of Mumbai’s largest real estate developers and has developed over 40 projects across the city, aggregating about 11.30 million sq. ft. Photo: Ramesh Pathania/Mint

  • Given the revival in sentiment for residential real estate in Mumbai, Oberoi is targeting launches spread across 4-5 million square feet in Q4FY21. However, the exact phasing and pricing of these projects are awaited

MUMBAI: Foreign brokerage house CLSA has raised the target price of Oberoi Realty to Rs625. Shares of the Mumbai-based real estate developer rose around 1.5% on Monday, trading at Rs552 on the National Stock Exchange.

The brokerage house is of the view that the company's new launches coupled with its near-ready projects in Worli, Borivali, and Mulund will drive sales growth of around 19% over fiscal year 2021-23.

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In the December quarter, Oberoi Realty saw its highest ever quarterly sales bookings in five years at Rs970 crore. In Q4FY21, the company is expected to launch a 70 storey tower -Oberoi Elysian in Goregaon project.

According to dealers channel checks by domestic brokerage house ICICI Securities Ltd, the new tower may have ~362 units (234 3BHKs and 128 4BHKs) with a potential sale value of over Rs1,800 crore.

Given the revival in sentiment for residential real estate in Mumbai, Oberoi is targeting launches spread across 4-5 million square feet in Q4FY21. However, the exact phasing and pricing of these projects are awaited.

Further, CLSA recommends investors to switch from Godrej Properties Ltd to Oberoi Realty Ltd as the latter is better placed on the valuation front. CLSA has a sell rating on Godrej Properties Ltd.

According to Bloomberg data, shares of Oberoi Realty are trading at a one-year forward price-to-earnings multiple of 26 times, much lower than the 2 times multiple of Godrej Properties.

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