Oberoi Realty-A simple real estate story

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.

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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.

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FY 19 Q3 Results

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?

Oberoi Realty Ltd

Highlights of Q3FY19 and Nine Month FY19 Results


  • Q3FY19
    • 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 .

Looks like a Cup and Handle Formation. @hitesh2710
There is a double top at 600 so that will be a resistance zone.

Depth of the cup is 600-375 = 225, so target could be 600+225 = 825

Fundamentally its one of the best real estate player


Have you come across Subsidiary Annual reports by any chance. I Could not locate those on their website.


Hi Vishal,

Found one subsidiary AR on Oberoi website -

Incline Realty Private Limited - Fy17-18, Fy16-17 and Fy15-16

You may want to write to Oberoi Investor Relations (ir@oberoirealty.com) for other subsidiary ARs.

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Thanks, Sandeep.
Also, were you able to find a way to calculate the project wise profitability?

Oberoi to enter affordable housing. The company will launch 3000 apartment project in Thane.


Disclosure: Invested

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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.

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Oberoi Realty Q2FY20 Concall Summary

Business Updates

  • 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


Bank of America



Morgan Stanley

Axis Capital

Motilal Oswal

Goldman Sachs

SBI Caps



  • 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
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Oberoi Realty Q3FY20 Concall Summary

Business Update

  1. Have launched Maxima for existing customers and full launch is expected in next week
  2. Construction for Commerz 3 has started in Goregaon


• ICICI Securities
• JP Morgan
• Macquarie
• Kotak MF
• Morgan Stanley
• Franklin Templeton
• JM Financial
• Motilal Oswal
• Edelweiss


  1. 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
  2. The confidence on the Mulund project is coming back as footfalls have increased
  3. The Occupation Certifiacte(OC) for Worli project should come by April and expecting uptick in sales to happen post that
  4. The OC for Ritz Carlton project will be received in December 2020
  5. Pricing for projects for individual sales are different for bank loan customers vs deferred payment structures
  6. 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
  7. 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
  8. The capex outlay for the annuity projects in FY21 & 22 will be at around Rs 5000/sq foot for construction cost
  9. If an offer comes for the Ritz Carlton hotel for an outright sale would be happy to go ahead with it
  10. 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
  11. Total development potential of 12 million sq foot at the Thane project. Have not decided on the entire layout for the project
  12. 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
  13. The management feels the property is better than the adjoining Raymond property
  14. The residential market is moving towards completing the projects first and then demand for final actual use come in
  15. Targeting to take the annuity income to Rs 1500-1600 crores on an annual basis
  16. Already 1500 apartments have been sold in Prisma project and the current inventory is the last batch of apartments left in the project
  17. 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
  18. 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

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Sharekhan Viewpoint Report