Oberoi Realty shares jump 9% to new all-time high after 65% increase in net profit. Should you invest?

Shares of Oberoi Realty on Thursday jumped 9% to hit a fresh 52-week high of Rs 1,712.30 after the company reported a 65% year-on-year (YoY) jump in its Q4 profit at Rs 788 crore.

The total income of the company rose to Rs 1,558.56 crore in the quarter from Rs 995.11 crore in the year-ago period, according to the regulatory filing on Tuesday.

The realty player also announced its plans to raise up to Rs 4,000 crore through the issuance of equity shares and non-convertible debentures along with a dividend of Rs 2 per share. May 23 will be the record date for the payment of the said dividend.


Here’s how brokerages view the earnings:

Jefferies

Global brokerage firm Jefferies believes there was a strong response to the new launch that drove a pre-sales jump at Rs 4,000 crore and a P&L beat in the quarter. The execution is likely to remain steady as management showed focus on quality delivery. At 15%+ NAV, Jefferies finds the upside to be limited.

Jefferies has maintained a ‘hold’ rating on the stock with a target price of Rs 1,341.

Motilal Oswal

Motilal states that Oberois’ completed projects have the potential to cumulatively generate over Rs 1,500 crore of surplus cash annually, which, coupled with the scale-up in rental income, provides enough firepower to capture the business development opportunity.


The domestic brokerage retained a ‘neutral’ view on the stock and increased the target to Rs 1,585.

Kotak Institutional Equities

Domestic brokerage Kotak Equities mentions that Oberoi Realty has a large inventory of completed/near-completed assets which will likely yield very healthy cash generation. Oberoi has upcoming launches 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,” stated the KIE report.

KIE has maintained a ‘reduce’ call on the stock with a revised target price of Rs 1,375.

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The company has passed an enabling resolution for issue of non-convertible debentures up to an aggregate amount of Rs. 2000 crore by way of private placement, in one or more offerings.

The shares of Oberoi Realty have given 74% returns in the last one year while gaining 28.7% in the last three months.

Oberoi Realty is one of India’s leading real estate development companies, which is focused on premium developments in the residential, office space, retail, hospitality, and social infrastructure verticals.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)