Oberoi Realty: Softer offtake leaves investors with little room for optimism

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Subscribe to enjoy similar stories. Shares of Oberoi Realty Ltd are on a shaky ground, plummeting 13% in the past two trading sessions. The fact that sales momentum did not sustain in its marquee project Three Sixty West located at Worli in Mumbai and other projects has weighed heavily on sentiment.

Oberoi sold only two units in Three Sixty West in the December quarter (Q3FY25), compared to a run rate of six units in the previous two quarters. Sales in Eternia, Enigma (both located in Mulund), Sky City (Borivali), and Forestville (Kolshet Road, Thane) were also muted. Oberoi took significant (5-15%) price hikes in its key projects of Sky City, Elysian, Eternia/Enigma during the quarter, which may take time to get absorbed.

Softer offtakes cloud Oberoi’s FY25 pre-sales trajectory, resetting expectations lower. “For 360 West, we now expect an inventory of 38 units to be rundown over the next three-four years versus around two years previously," said Nomura Global Markets Research report dated 21 January. Nomura has cut its FY25 pre-sales target to ₹5,800 crore from ₹6,800 crore previously.

Bothered by similar issues, Antique Stock Broking is penciling in Oberoi’s FY25 pre-sales at ₹6,000 crore from ₹6,500 crore earlier. Both broking firms have reduced the stock’s target price. Pre-sales of ₹1,920 crore in Q3FY25 rose sequentially and year-on-year, but missed analysts’ estimates.

The jump was mainly led by large bookings at the newly launched Jardin project at Oberoi Garden City, Pokhran Road in Thane, which contributed 70% to the quarter’s pre-sales. Here, Oberoi launched two towers (phase 1) out of five in October. “Oberoi had announced clocking gross bookings of ₹1,350 crore within the first three days of the launch.