This midcap realty stock declines even as brokerages remain bullish anticipating healthy pre-sales and cash generation

Shares of midcap real estate player Oberoi Realty are in focus as brokerages remain bullish on the counter after the company has executed a development agreement for 81.05 acres equivalent to 3,28,010 square meters land in Alibaug. At around 10:04 am in Thursday's session, the stock traded with a cut of 0.76 per cent or Rs 17.35 at Rs 2,272.9 after it rose around 1 per cent to the day's high price of Rs 2,309.95 per share.

The company in its filing clarified that out of the above land, 8.6 acres equivalent to 34,803 square meters shall be earmarked for construction of high-end luxury 5 (five) star hotels / resort.

Further, on the balance land measuring 72.45 acres equivalent to 2,93,207 square meters, the company intends to construct approximately 150 high-end luxury, fully serviced, branded residential villas.

The consideration for the transaction to the landowners is in the form of revenue and area share from the said residential project.

Upon execution of the above agreement, the company has taken physical possession of the above land, added the filing with the exchanges.

Oberoi Realty share price performance 

1 month    15%
6 month    27%
YTD              58%

Oberoi Realty's focus on luxury segment

As per Zee Business Research inputs, luxury segment contributed to 58 per cent of the company's revenue in the quarter ended September 2024. Also, continuing focus on the segment witnessing high demand has strengthened the company's margins.

In the previous September quarter, the company logged the highest margins as well as profits in thirteen straight quarters.

The company's gross bookings for Oberoi Garden City, Thane is at a whopping Rs1,348 crore and also it plans to launch new projects in Gurugram by September 2025.

Brokerages view on Oberoi Realty

Nomura has initiated its 'buy' rating on the counter with a target set at Rs 2,500, implying gains of over 9 per cent from the previous close. The buy has been suggested anticipating better pre-sales and cash generation.

For FY24-27, the company expects its pre-sales to get a boost by an average 40 per cent. Also, operating cash flow is expected to be Rs 3,000 crore- Rs 4,000 crore annually by FY27.

Elara Capital has also retailed its buy call on the counter with the target pegged at Rs 2,350 per share. The brokerage anticipates Alibaug project's gross development value or GDV to range between Rs 4,000 crore- Rs 5,000 crore. 

Further it expects pre-sales growth at 59 per cent over FY24-FY26E and margins in the residential project segment to be  at 48 per cent/56 per cent in FY24/H1FY25.