(Note: BUY, TP: 1001 Rs, Going up: 49%)
– We have come to terms with the expected price increases (2-3% increases that we previously considered – ive) for residential projects due to the increasing cost of inputs. We believe that the speed of OBER sales will increase over the next few quarters, which is why we have shortened the project cycle. Residential business valued at Rs67.4 billion (Rs185 / share).
– We assumed that the company would actively add redevelopment projects of a size at least similar to that of the company Shiv Shahi.
– Management is excited to expand the “Oberoi” brand to other geographies and actively assess opportunities. Therefore, we added BD by looking at the history of adding projects. We assumed the company would add a project to the tune of 5 msf each with a 3 to 5 year spread and came out with a value of Rs6.6 billion (Rs18 / share).
– We believe that with the consolidation observed in the sector, a better player like OBER will always have the advantage thanks to quality products, delivery history and a lean balance sheet (D / E of 0.17x). The entry into redevelopment activities and geographic diversification will further increase the visibility of the brand as well as gain market share. We have given a 20% premium to the current portfolio to be the leader in the high-end residential segment and arrived at a SoTP-based net asset value of Rs1 / share (WACC 10%, cap rate of 8%) and keep so our note “BUY” in stock.
OBEROI REALTY LIMITED shares were last trading in BSE at Rs. 719.5 from the previous close of Rs. 740.15. The total number of shares traded during the day was 52,423 in more than 3,452 transactions.
The stock hit an intraday high of Rs. 744.85 and an intraday low of 713. Net turnover during the day was Rs. 38,227,226.