Oberoi Realty - Q1FY21 Result Update - ICICI Securities

Oberoi Realty's (ORL) weak Q1FY21 print is a clear reflection of a weak residential real estate market in Mumbai coupled with the pain of hotel and mall closure amid Covid-19. Q1 sales volumes plunged 94.9% YoY to merely 12,308 sq ft while that in Q4FY20 were down 12.2% YoY at 1.27 lakh sq ft. Revenues declined 80.4% YoY to Rs. 118 crore in Q1FY21, on account of almost stalled execution in the residential segment leading to revenue recognition of 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 revenue recognition for Oberoi mall due to uncertainty on account of Covid-19. EBITDA margins expanded ~10 percentage points (pp) YoY to 49.1% given lower cost recognition with insignificant execution in the residential segment. PAT declined 81.5% YoY to Rs. 28.1 crore.

Valuation & Outlook

Near term challenges in residential demand, hospitality segment and mall are visible but ORL is well positioned to tide over the same with comfortable debt levels. Nonetheless, we expect the recovery to be a slow grind with demand recovery at least taking a year and build in slower volumes traction, going ahead. Hence, we assign a HOLD rating (vs. BUY earlier) with a revised target price of Rs. 410.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_OberoiRealty_Q1FY21.pdf

Shares of OBEROI REALTY LTD. was last trading in BSE at Rs.364.9 as compared to the previous close of Rs. 364.4. The total number of shares traded during the day was 6100 in over 739 trades.

The stock hit an intraday high of Rs. 379.95 and intraday low of 361.2. The net turnover during the day was Rs. 2226903.

Source : Equity Bulls

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