Oberoi Realty - March 2013 Results Preview - Motilal Oswal

- EBITDA, PAT to decline YoY: We expect revenue to grow 2% YoY to INR2.6b, EBITDA to decline 6% YoY to INR1.6b, and PAT to decline ~11% YoY to INR1.3b. EBITDA margin would be 60%. Revenue recognition from Esquire has already been delayed to FY14 due to prolonged construction stagnancy owing to absence of layout approval under new DCR.

- Sales run rate to remain flat QoQ: 4QFY13 sales run rate is likely to remain largely flat QoQ. Oberoi has increased prices across projects - by INR1,000/sf to INR16,500/sf / INR13,500/sf for Exquisite/Esquire and by INR500/sf to INR15,000/sf for Splendor/Grande. We expect delivery for Exquisite by March 2014. The handover process is underway for Grande.

- Valuation and view: The stock trades at 9.2x FY15E EPS of INR30.3, 1.6x FY15E BV and at ~28% discount to our NAV estimate of INR350/share. Maintain Buy.

Source : Equity Bulls

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