Oberoi Realty - Q3FY21 First Cut - ICICI Direct

CMP - Rs. 567; MCap: Rs. 20,625 crore

Oberoi Realty reported strong operational performance with better than expected sales volumes. The financial reported performance was better owing to higher sales volumes of complete/near complete units resulting in strong revenue recognition in the residential segment, driving superior EBITDA and bottomline.

Q3FY21 Earnings Summary

- The company reported sales volume of 5.1 lakh sq feet vs. 1.55 lakh sq feet in Q3FY20, reporting a strong growth of ~230% YoY. The sales value was up 220% YoY at Rs. 970.8 crore. While robust sales volume traction was expected, growth is much better than anticipated and the key monitorable will sales volume traction going ahead coupled with launch pipeline

- On the financial front, Reported revenues grew by 57.1% YoY to Rs. 828.4 crore in Q3FY21(our estimates: Rs. 500 crore). The beat was due to residential segment revenue recognition which stood at Rs. 703.3 crore, up 84% YoY, owing to given the sale of complete/near complete projects like Esquire, Enigma and Sky City which translated into high revenue recognition. The washout performance in hospitality continued with revenues of Rs. 11.1 crore vs. Rs. 38.2 crore in Q3FY20, down 71% YoY, albeit sharply better than Rs. 6.4 crore in Q2, up 74.4% QoQ. The rental revenues (from mall and office assets) stood at Rs. 104 crore, up 13.5% YoY.

- Reported EBITDA margins were up 258 bps YoY to 46.2% on account of strong revenues recognition. The consequent EBITDA at Rs. 383.5 crore, up 66.3% YoY was much higher than estimates of Rs. 249.2 crore, as the beat at revenues levels percolated to EBITDA.

- The reported PAT was higher at Rs. 286.7 crore (our estimates Rs. 172.4 crore), up 93.4% YoY, owing to beat at operating level.

The growth residential segment was expected but actual volumes growth is much higher than anticipated and traction ahead will be key. We seek further clarity on the residential launches and overall demand outlook and benefits of state's measures 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 on Monday.

Shares of OBEROI REALTY LTD. was last trading in BSE at Rs.567.25 as compared to the previous close of Rs. 571.15. The total number of shares traded during the day was 21658 in over 1627 trades.

The stock hit an intraday high of Rs. 575.7 and intraday low of 561.15. The net turnover during the day was Rs. 12286462.

Source : Equity Bulls

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