I believe sales are expected to pick up at a brisk pace in Oberoi once OC comes. Further, apartments at higher floors are much easier to sell. The Ritz carlton tower where apartments go at 120 cr a pop (last deal of Nirav Bajaj) are likely to take a lot longer. In general though, I believe as compared to all other inventory in that area, Oberoi’s inventory is likely to sell out before the others.
The good thing is that no new projects of similar ticket size is being launched in the area. Even existing players are converting to commercial.
On the same note, after speaking to a few brokers in the area, I was informed that Omkar’s towers which are right next door have almost 60-70 apartments unsold even though OC has been received which makes me question my own GST/OC hypothesis.
As on 31-3-2018 the Investment in Non Current unquoted Investment is Rs.2406.55 cr. Out of this
Rs.1906.35 cr is invested in one Oasis Realty and no further details are given. This being a huge amount it is definitely a Red flag.
to the best of my knolwledge Oasis Realty is the worli residential project that is in JV with oberoi responsible for bringing all the funding and will take back also first its investments. They have mentioned a few times in the concall.
Revenues up 48.4% at Rs 528.6 cr vs Rs 356.2 cr
Net profit up 14.7% at Rs 137.9 cr vs Rs 120.2 cr
EBITDA down 2.3% at Rs 188.1 cr vs Rs 192.6 cr
Margins at 35.6% vs 54.1 %
Operating Costs up 26% at Rs 353.7cr
Any reasons for margins being down ? Affordable housing entry?
Revenue stood at 548 Cr compare to 619 Cr Q2FY19 and 360 Cr for Q3FY18
PBT stood at 195 Cr compare to 307 Cr for Q2FY19 and 183 Cr for Q3FY18.
PAT stood at 137 Cr compare to 213 Cr for Q2FY19 and 120 Cr for Q3FY18.
EBITDA margin for Q3FY19 was 42 % for the quarter.
PAT margins were 25 % for the quarter.
Key Highlights
Commenced bookings for the fifth tower at Sky City, Borivali
Crossed 1,000 units of bookings in Sky City
Investment properties continues steady and strong performance.
Oberoi mall contributed 38 Cr to the operating revenue against 37 Cr for Q2FY19 and 27 Cr for Q3FY18. EBITDA margin in this project is excess of 95 %.
In commerz company office space asset contributed Rs 10 Cr to the operating revenue for the quarter compare to 10 Cr for Q2FY19 and 11 Cr for Q3FY19. EBITDA margin in this project was in excess of 95%.
In commerz phase-1 contributed about 22 Cr for the quarter compare to 18 Cr in Q2 FY19 and 11 Cr for Q3FY18.
Western Mumbai contributed about 36 Cr of the operating revenue for this quarter compare to 36 Cr for Q2FY19 and 35 Cr for Q3FY18. EBITDA margin in this project continuous in excess of 33 %.
Development Properties
For Aspire which is project of 21.21 lakh sqft in that company have booked nearly 30,000 Sqft in the quarter till date about 15.45 lakh sqft which is about 72 % of the inventory. Total booking value for the quarter is Rs 66 Cr compare to 110 Cr in Q2FY19 and 48 Cr for Q3FY18. Cumulative booking date till date is about 2456 Cr and total revenue recognize in this project was 66 Cr and cumulative revenue recognition till date is 2456 Cr on account of 100 % of project completion.
For Exquisite which total size is 15.47 lakh sq ft out of which company have booked 14.2 lakh sqft which is 90 % of the project. Total booking value in this quarter was Rs 4 Cr compare to 39 Cr in Q2FY19 and 41 Cr for Q3FY18 and cumulative booking value till date is about 2351 Cr. Total revenue recognize for this project is 4 Cr and cumulative revenue recognition till date stands at 2351 Cr on account of 100 % of project completion.
For Prisma which total size is 2.68 lakh sq ft till date company have booked 2.31 lakh sqft which is about 86 % of inventory in this project. Cumulative booking value till date is 407 Cr and cumulative revenue recognition till date is also 407 Cr on account of 100 % project completion.
For Eternia which is 21.48 lakh sqft project in which company booked about 22,000 sq ft in quarter and till date booked about 5.86 lakh sq ft. Total booking vale for the quarter was 32 Cr compare to 34 Cr last quarter and 10 Cr for same quarter last year and cumulative booking value till date is about 856 Cr. Total revenue recognize in this project is 57 Cr and cumulative recognition till date is about 292 Cr.
For Enigma this quarter company book about 28000 sq ft and 3.96 lakh sqft till date. Total booking value for the project was 36 Cr as against 27 Cr on Q2FY19 and cumulative booking value till date is about 584 Cr. Total revenue recognize for this project is 18 Cr and cumulative revenue recognition till date is about 104 Cr.
For Skycity company booked over 75,000 sq ft in this quarter and till date about 15.47 lakh sqft. Total booking value for this quarter was 119 Cr compare to 130 Cr for Q2FY19 and 76 Cr for Q3FY18 and till date the booking value is about 2476 Cr. Total revenue recognize for this project is 246 Cr and cumulative revenue recognition till date is about 988 Cr.
For OSS 360 west booking value is 2235 Cr till date .
Oberoi, Brigade, Godrej, Sobha have the lowest unsold inventory in the country. Their numbers, 16/17/21 months respectively, are far below the 30 months average for the top 25 developers. In an environment of increasing inventory for competition (up 19% yoy on average) this indicates better execution and competitiveness for these developers.
The possession for Thane property has come to the company and transaction was closed at Rs 15 crore/acre
A IncomeTax search was carried out in August and the company doesn’t see any material impact of this
Participants
Bank of America
HSBC
Citigroup
Morgan Stanley
Axis Capital
Motilal Oswal
Goldman Sachs
SBI Caps
Edelweiss
QnA
The subvention schemes by banks are still continuing and are as per preference of the banks
Still on the drawing board with regards to launch of Thane project and that will be disclosed close to Q4 when the project is launched
The slowdown in sales of projects seems to be due to the general slowdown in the economy
Have started construction for Commerz 3 which has 1.8 million sqft leasable area and is under construction to be completed by March 2022
The work on Worli land has started for the mall and office space and a small hotel of 80-100 rooms to go along with
The construction work is expected to be complete on the Worli property in 2.5 to 3 years
Expecting the market to bounceback from this slowdown and there is nothing exceptional about this slowdown in sales
Not interested in any legacy projects through NCLT
The Worli project has a clearance for 75 floors on the back tower while civil aviation clearance for only 65 floors and the company is waiting for one more quarter to decide on whether it can get a few more floors under clearance
The Mulund project is facing some trouble from the buyer’s part in term of financing
The mall in Worli will be built and started much before the office building in Worli
Have applied for OC for 360 West and expecting it in 3-4 months
There are far too many developers in India and slowly that system is changing
The land acquisition for Thane project led to operational cash flows becoming negative
Have launched Maxima for existing customers and full launch is expected in next week
Construction for Commerz 3 has started in Goregaon
Participants
• ICICI Securities
• JP Morgan
• IIFL
• Macquarie
• Kotak MF
• Morgan Stanley
• Franklin Templeton
• JM Financial
• Motilal Oswal
• Edelweiss
QnA
The work on Phase 3 Goregaon has already started and Thane project has commenced with show apartment and planning to launch both of these projects in H1 FY21
The confidence on the Mulund project is coming back as footfalls have increased
The Occupation Certifiacte(OC) for Worli project should come by April and expecting uptick in sales to happen post that
The OC for Ritz Carlton project will be received in December 2020
Pricing for projects for individual sales are different for bank loan customers vs deferred payment structures
One tenant has left Commerz 1 because of unavailability of additional space in the existing project. This will be gone to another tenant in the next quarter
The demand for office space in Goregaon is very good and supply is low and if Commerz 3 was available it would have been leased out at a better price
The capex outlay for the annuity projects in FY21 & 22 will be at around Rs 5000/sq foot for construction cost
If an offer comes for the Ritz Carlton hotel for an outright sale would be happy to go ahead with it
Don’t see supply coming in residential market in a big way and in the future residential market will go through the same like the commercial market is going through right now
Total development potential of 12 million sq foot at the Thane project. Have not decided on the entire layout for the project
Will put up a mixed use project like Oberoi Garden City in Goregaon in Thane as well and will be named Garden City as well
The management feels the property is better than the adjoining Raymond property
The residential market is moving towards completing the projects first and then demand for final actual use come in
Targeting to take the annuity income to Rs 1500-1600 crores on an annual basis
Already 1500 apartments have been sold in Prisma project and the current inventory is the last batch of apartments left in the project
There is another 200 room hotel coming up in Commerz 3 as well and as far as Borivali is concerned there will be a 4 star hotel on the top of the mall. Another hotel is being planned in Thane project as well
Have bid for the Lavasa project to study the market and then proceed further if any action needs to be taken in it or not
The revision in the outlook from “Stable” to “Negative” reflects expected moderation in the credit risk profile of entities involved in the real estate development owing to the ongoing lockdown in the country implemented by the central government towards containment of COVID-19
