Reiterate BUY on Oberoi Realty – TP Rs.314 - Geojit BNP Paribas

- Buy rating is reiterated on Oberoi Realty with a target price of Rs.314 over one year

- The company reported Q2FY13 revenues of Rs.280 crores which is an increase of 10.1%, YoY, and 22.5%, QoQ. The revenues came in higher than market estimates

- EBITDA margins came in at 62% while EBIT margins were 4.7%, as compared to 9.4% in Q1FY13 and -2.7% in Q2FY12.

- The Worli project was soft-launched and has already sold 4-5 units. This implies contracted sales value of Rs.140 – 180 crores (15-19% of FY12 revenue).

- Contracted sales volume (excluding Worli project) came in at 0.13m sq ft vs. 0.12m sq ft in Q1FY13 and 0.19m sq ft in Q2FY12.

- The cash balance fell Rs.200 crores, due to capex on Transfer on Development Rights (Rs.100 crores) and a mismatch on construction spent (usually higher at the end of a project) and receivables.

- Total sales value (including sales from newly acquired Glaxo Worli plot) was around Rs.600 crores (65% of FY12 revenue).

- Rental income remained stable at Rs.34.6 crores which is up by 7%, QoQ, and 7.5%, YoY.

- Execution remained on track.

- Key catalyst: Launch of Worli / Mulund residential projects.

- Oberoi Realty is reiterated as the top pick in the sector.

Source : Equity Bulls

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