Oberoi Realty - Q1FY21 First Cut - ICICI Securities

CMP - Rs. 368.7; MCap: Rs. 13,404 crore

Oberoi Realty reported a weak set of Q1FY21 numbers as residential sales volumes dried up coupled with closure of malls and near insignificant revenues from the hospitality segment. The Q4FY20 numbers, however, were relatively stable and on the expected lines with superior revenue recognition in the real estate segment.

Q1FY21 Earnings Summary

- For Q4FY20, the company reported sales volume of 1.26 lakh sq feet (I-direct estimate: 1.12 lakh sq feet) vs. 1.45 mn sq feet in Q4FY19, reporting a decline of ~13% YoY. The sales value for Q4FY20 was down 33.3% YoY at Rs. 212.6 crore, given the higher sales of the Worli project in the base quarter. For Q1FY21, sales volume was down ~95% YoY at 12308 sq feet, given the lock down effect

- On the financial front, Reported revenues de-grew by 93.9% YoY to Rs. 118 crore in Q1FY21, much below expectations of Rs. 313.5 crore, on account of almost stalled execution in residential segment leading to revenue recognition of Rs. Rs. 57.3 crore (vs. Rs. 463 crore in Q1FY20), washout performance in hospitality (revenues of Rs. 2.3 crore vs. Rs. 31.9 crore in Q1FY20) and zero revenues recognition for Oberoi mall due to uncertainty on account of Covid-19 impact

- Reported EBITDA margins were up 10 percentage points YoY to 49.1% on account of lower cost recognition as there was insignificant execution in the residential segment.

- The reported PAT declined 81.5% YoY to Rs. 28.1 crore

- The company's board has also passed enabling resolutions for issue of non-convertible debentures up to Rs. 1,500 crore by way of private placement as well as issue of equity shares for up to Rs. 2,000 crore by way of QIP

The near term challenges in the residential demand, hospitality segment and mall are visible for the company, but the company is well positioned to tide over the same with comfortable debt levels and above mentioned fund raise. We seek further clarity on the residential launches and overall demand outlook coupled with status of malls and the hospitality segment from the management. We will review our estimates and come out with a detailed report post the conference call.

Shares of OBEROI REALTY LTD. was last trading in BSE at Rs.371 as compared to the previous close of Rs. 368.65. The total number of shares traded during the day was 15515 in over 1031 trades.

The stock hit an intraday high of Rs. 375.65 and intraday low of 358.2. The net turnover during the day was Rs. 5711986.

Source : Equity Bulls

Keywords