Hold Oberoi Realty, target price Rs 410: ICICI Direct

ICICI Direct has given a hold rating to Oberoi Realty with a target price of Rs 410. The share price moved down by 0.36 per cent from its previous close of Rs 387.15. The stock’s last traded price is Rs 93.25.

Oberoi Realty Ltd., incorporated in the year 1998, is a Large Cap company (having a market cap of Rs 14073.22 Crore) operating in Real Estate sector.

Financials
For the quarter ended 30-06-2020, the company reported a Consolidated sales of Rs 118.02 Crore, down 80.83 % from last quarter Sales of Rs 615.50 Crore and down 80.44 % from last year same quarter Sales of Rs 603.25 Crore. The Company reported net profit after tax of Rs 26.59 Crore in latest quarter.


Investment Rationale
Post lockdown lifting, the brokerage expects sales volumes to rebound (albeit weaker YoY). It bakes in sales volumes decline of ~30% YoY at ~97600 sq feet. On the financial front, it is likely to witness a sharp decline in revenue on account of rental wavier for lockdown period, non-operational hospitality portfolio and relatively weaker execution given suboptimal labour and heavy monsoon. On the financial front, it expects topline to de-grow 34.5% YoY to Rs 320.2 crore on account of relatively lower real estate revenue recognition and impact on mall and hospitality portfolio. Overall, it expects net income to decline 38.5% YoY at Rs 84.9 crore.Key Monitorable: Progress on annuity portfolio, commentary on sales volumes, progress on new launches such as Thane & Exquisite-III in Goregaon

Promoter/FII Holdings
Promoters holds 67.7 per cent stake in the company as of March 31, 2020, while FIIs held 24.9 per cent, DIIs 5.5 per cent and public and others 1.9 per cent.