Oberoi Realty stock gains for 4th day in a row, touches new all-time high – here’s why
Oberoi Realty's winning streak continued with a 8.70% surge, closing at ₹1,711 and hitting a record high of ₹1,727.95. Strong Q4 and FY24 performance boosted investor confidence.
Oberoi Realty shares extended their winning streak for the fourth consecutive day on Thursday, posting a surge of 8.70% to close at ₹1,711 per share. The stock also registered a new record high of ₹1,727.95 during the session.
Investor confidence remained high following the company's strong performance in Q4 and FY24, which was released during Wednesday's trading hours. The company reported record quarterly and annual profit driven by robust sales and operational excellence.
In Q4FY24, the company reported a consolidated revenue of ₹1,558.56 crore, up from ₹1,082.85 crore in Q3FY24, while FY24 revenue reached ₹4,818.77 crore, compared to ₹4,293.20 crore in FY23.
Its consolidated profit after tax for Q4FY24 surged to ₹787.71 crore from ₹360.02 crore in Q3FY24, with FY24 profits reaching ₹1,925.17 crore compared to ₹1,903.93 crore in FY23.
In FY24, bookings totaled ₹39.4 billion, a 22% YoY increase. The performance was bolstered by the launch of the new tower at Elysian, generating ₹8 billion in bookings in January '24. Additionally, three units at the ultra-luxury project 360 West were booked, totaling ₹2.2 billion.
Collections surged by 26% YoY to reach ₹10.8 billion, while net debt decreased by ₹9 billion to ₹12 billion, resulting in a debt-to-equity ratio of 0.09x.
The company's near-term launch pipeline remains robust, with domestic brokerage firm Motilal Oswal projecting a 41% CAGR in bookings from FY24 to FY26, amounting to ₹79 billion.
OBER's completed projects, including Sky City Phase 1, 360-West, and Eternia Enigma, have the potential to collectively generate over ₹15 billion in surplus cash annually. This, coupled with the increase in rental income, provides ample resources to seize business development opportunities, according to the brokerage.
The brokerage estimates the value of the company's residential business at ₹360–370 billion at current valuations. Additionally, the projected value of the existing pipeline, including the Gurugram project, is ₹230 billion, representing a 50–60% going concern premium, which already factors in prospective business development in the near term, said the brokerage.
Should you buy the stock after Q4 earnings?
Motilal Oswal revised its target price on the stock to ₹1,435 apiece but retained its ‘Neutral’ rating on the stock. Similarly, Kotak Institutional Equities also lifted its target price on the stock to ₹1,375 apiece with a ‘reduce’ rating.
“Oberoi Realty has a large inventory of completed/near-completed assets at Three Sixty West (Worli), Eternia and Enigma (Mulund), as well as Sky City (Borivali), which will likely yield very healthy cash generation. Oberoi has upcoming launches at Pokhran Road (3QFY25) as well as Gurgaon (FY2026E), which marks Oberoi’s maiden venture outside Mumbai. We believe the CMP adequately reflects the positives, even as the company has lagged the peer set on growth in development business,” said the brokerage.
Meanwhile, the demand for residential properties in India is on the rise, driven by the expanding economy, as individuals actively seek to purchase homes, particularly in the luxury segment.
Significant investments from high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) in the Indian residential market are further bolstering this demand.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
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