Oberoi Realty - All eyes on upcoming Goregaon launch - ICICI Securities

After recording its highest ever quarterly sales bookings in five years in Q3FY21 at Rs9.7bn, OBER is all set to launch a new 70 storey tower in Q4FY21 christened Oberoi Elysian at its Garden City, Goregaon project in Mumbai's western suburbs. As per details available on Maharashtra RERA website and our channel checks, the new tower may have ~362 units (234 3BHKs and 128 4BHKs) with unit ticket sizes ranging from Rs45-60mn+ or a potential sale value of over Rs18bn. We expect OBER to clock over Rs30bn of sales bookings each in FY22-23E owing to new launches and completed/near completion inventory in Worli/Mulund/Borivali projects. We maintain our BUY rating with an unchanged target price of Rs645/share at a 10% premium to NAV considering growth opportunities. Key risks to our call are a decline in demand for residential properties and higher costs owing to rising material prices.

- Response to New Goregaon tower launch a key monitorable: As per Maharashtra RERA website (Project RERA number P51800027667), Oberoi Elysian Tower A in the Oberoi Garden City, Goregaon East complex is a 70 storey super structure tower with a total of 362 units spread across 234 3 BHK units having carpet area ranging from 1,872-1,980sft and 128 4BHK units with 2,538sft carpet area each. The proposed RERA completion date is 31st December, 2026. Indicative pricing as per our channel checks suggest a carpet area rate of Rs23,750/psf and 26,750/psf for Construction Linked Plan (CLP) and Bank/Builder subvention, respectively. This implies a base unit ticket size of Rs45-47mn+ for 3BHKs units and Rs60mn+ for 4BHK units or an overall potential sale value of over Rs18bn on the initial project pricing. While we await details from the company on exact area launched for sale, the ticket sizes compared well with existing inventory in the completed Esquire project. While response to completed inventory has picked up from Q3FY21 with OBER recording its highest ever quarterly sales bookings in five years at Rs9.7bn in Mumbai, the response to this new tower launch may provide an indicator of underlying demand for new launches in luxury/premium projects.

- Further upcoming launches likely in Q4FY21-Q1FY22: With clarity on FSI norms emerging under the Unified DCR for Maharashtra (ex-Mumbai city/suburbs) and overall revival in market sentiment in Mumbai, OBER is targeting launches spread across 4-5msf in Q4FY21 (1msf in Thane and balance area in Goregaon and Borivali projects). While exact phasing and pricing of these projects are awaited, these upcoming launches along with completion of 360 West Worli project and near completion inventory in Mulund and Borivali is expected to drive the sales momentum over the next 12-18 months. We expect OBER to clock over Rs30bn of sales bookings each in FY22-23E.

Shares of OBEROI REALTY LTD. was last trading in BSE at Rs.588.85 as compared to the previous close of Rs. 562.4. The total number of shares traded during the day was 25364 in over 1455 trades.

The stock hit an intraday high of Rs. 599 and intraday low of 567.45. The net turnover during the day was Rs. 14959126.

Source : Equity Bulls

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