Broker’s call: Oberoi Realty (Buy)
Target: ₹2,560
CMP: ₹2,315.60
We are initiating coverage on Oberoi Realty with a Buy recommendation and a target price of ₹2,560. Oberoi Realty is a leading player in Mumbai, specialising in developments across residential, retail, hospitality, and social infrastructure segments. It is one of the strongest brands in the Mumbai Metropolitan Region.
The company is expected to fundraise a sum of ₹6,000 crore, which is expected to generate a GDV of ₹70,000-80,000 crore in the coming years. With a net debt-to-equity ratio of 0.02, the company is well-positioned to raise additional funds if required. Oberoi Realty has consistently maintained a net debt-to-equity ratio of 0.4, reflecting its strong financial discipline and resilience during challenging market cycles.
Its annuity cash flows are also set to grow, further contributing to its liquidity. This improvement in financial strength enhances the company’s ability to raise capital, supporting strong business development opportunities. Additionally, with a cash-rich balance sheet, the company can comfortably acquire large land parcels. Oberoi’s high margins (>50% EBITDA margin) and low leverage matrix will enable it to weather difficult periods effectively.
Our recommendation is supported by a dominant position in MMR, robust annuity scale-up, entry into new key markets and Low leverage with strong cashflows.
