Oberoi Realty - All Set for a Spurt in Activity; Result Update Q3FY15 :: Edelweiss

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Oberoi Realty (Oberoi) reported a strong Q3FY15 with volumes, revenues and profits surpassing our estimates. Importantly, management disclosed a pre-sales volumes of 0.6msf for INR8.5bn within first 5 days of its Mulund launch (launched in January 2015). is expected to be delivered in Q4FY15, which along with Borivali launch within Q1FY16 will ramp up the company’s volumes to 1.4msf for INR24.2bn and 2.2msf for INR40.8bn in FY15E and FY16E, respectively, against 0.21msf for INR5.6bn in FY14. Further, the company leased out ~50,000sft in in Q3FY15 and is targeting to lease out most inventory in CY15 itself.

Sales bookings beat estimates

Oberoi reported an improvement in sales bookings during the quarter, translating into revenue recognition ahead of our estimates. The company reported sales bookings of 147,941sft in Q3FY15 versus 41,155sft in Q2FY15. New launch , wherein it sold 26% of 0.26msf inventory on launch itself, bolstered sales. Sales bookings in ongoing projects and too picked up. Revenue at INR2,171mn surpassed our INR1,785mn estimate led by higher sales bookings in . Accordingly, the company’s EBITDA and PAT too beat our estimate by ~15% each.

Robust growth trajectory

The company has built a robust project pipeline. We expect sales to ramp up to 1.4msf for INR24,220mn and 2.2msf for INR40,850mn in FY15E and FY16E, respectively, against 0.21msf for INR5,577mn in FY14. Our forecast is anchored in strong response to launch of its Mulund project in Q4FY15, pick up in Oberoi Exquisite sales post delivery and expected launch of Borivali project in H1FY16. Further, Oberoi has leased out ~50,000sft in Commerz-II in Q3FY15 and is positive on leasing out most inventory in CY15 itself.

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https://www.edelweiss.in/research/Oberoi-Realty--All-Set-for-a-Spurt-in-Activity;-Result-Update-Q3FY15/28079.html