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Oberoi Realty – Multibagger Stock For the Month of June 2018

Price – Rs. 514.10

View – Buy

About the Company

Oberoi Realty Limited (“Oberoi Realty” or the “Company”) is India’s leading real estate development company, headquartered in Mumbai. The Company is focused on premium developments in the residential, office space, retail, hospitality and social infrastructure verticals.  The Company has delivered 40 completed projects across Mumbai.

[1] Residential

·        7 Ongoing Residential Projects

·        Total Area ~17 Mn Sq.ft

o   Ongoing ~10 Mn Sq.ft

o   Planned ~7 Mn Sq ft

·        High EBITDA margin with robust project pipeline

[2] Rental

·        Approx. 2 Mn Sq.ft of Leasable area across rental portfolio

·        Total Area ~7 Mn Sq.ft

o   Ongoing – Retail (2.6), Office (Nil)

o   Planned – Retail (0.3), Office (4.0)

[3] Hospitality

·        269 rooms in The Westin Mumbai Garden City

·        Upcoming

o   ~221 rooms in The Ritz-Carlton Mumbai

o    ~250-300 rooms in a 4 star hotel at Borivali

Established Brand across Mumbai

The Company is among the leading real estate developers with proven track record of 30+ years having completed 40 projects across residential, commercial, retail, hospitality and social infrastructure segment. The Company operates in Mumbai, one of the largest average residential ticket sizes across various segments.

Robust Pipeline of Ongoing / Planned Projects Across Segments

The Company has ~28 million sq. ft of ongoing & planned projects. Oberoi Realty Ongoing / planned projects inproven locations provide visibility of cash flows in the future.

Oberoi Realty

Key Ongoing Projects – Total Estimated Area: ~13 million sq. ft

Project

Act./Est. Area (mn sq. ft)

Residential – 76%

Eternia, Mulund

2.14

Enigma, Mulund

1.99

Sky City Phase I, Borivali

2.89

Three Sixty West, Worli

2.28

Prisma, JVLR

0.27

Maxima, JVLR

0.38

Hospitality – 2%

Three Sixty West, Worli

0.31

Retail – 20%

Sky City, Borivali

1.56

I-Ven, Worli

1.02

Social Infra – 2%

Oberoi International School II

0.32

Key Planned Projects – Total Estimated Area: ~15 million sq. ft

Project

Act./Est. Area (mn sq. ft)

Residential – 50%         

Phase III, Oberoi Garden City

4.59

Sky City Phase II, Borivali

1.71

Tardeo

0.35

Office – 25%

Commerz II – Ph II, Oberoi Garden City

2.30

Sky City Extension, Borivali

1.05

Mulund Commercial

0.14

Hospitality – 15%

Sky City, Borivali

0.17

I-Ven, Worli

0.68

Social Infra

Educational Complex, Oberoi Garden City

0.87

Hospital, Oberoi Garden City

0.38

Strong Financials

The Company reported 40% increase in its consolidated net profit at Rs 142.92 Cr. for the quarter ended March as compared to Rs 101.82 Cr. in the year-ago period. Total income rose to Rs 352.84 Cr. in the fourth quarter of the last fiscal compared with Rs 302.33 Cr. in the corresponding period of the previous year. This was primarily driven by around 19 % y-o-y jump in revenue from real estate segment.

During FY 2018, the net profit rose to Rs 458.80 Cr. from Rs 378.59 Cr in the previous fiscal.

Strong Balance Sheet – The Company has maintained optimal capital structure with prudent use of leverage.

The Company is our top pick in the real estate sector as it is cash rich and has a robust order book. The order book stood at Rs. 5,360.82 Cr. at the end of FY18 as against Rs 5,037.45 Cr. at the end of FY17.

About the Author

Rajat Sharma pictureRajat Sharma is a well known stock market analyst and commentator. He has covered Indian markets for over a decade and is regarded for consistently identifying early stage investment opportunities. Attorney by qualification, Rajat has done extensive work for improving corporate governance and disclosure standards.