Buy Oberoi Realty - Geojit BNP Paribas

Reiterate 'buy' on Oberoi Realty – TP Rs.314

- Buy rating on Oberoi Realty is reiterated with a target price of Rs.314 as earlier. The scrip is our top pick in the sector.

- Execution of residential projects is on track despite a slowing market and most developers are faltering.

- Office projects in the suburbs delayed due to muted demand, but this has been expected and is unlikely to have any major impact on the stock price.

- Residential prices hiked by 12%, but doubts persists on its sustainability because the average sales price in the market is at 20-30% discount to Oberoi's ready projects. Moreover, it would take 15 quarters to exhaust its inventory if sales move at the current average run rate of 0.15 million sq ft.

- Past precedence shows that the company may roll back prices if the volume is impacted significantly.

Source : Equity Bulls

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