The brokerage firm Nuvama Institutional Equities slashed the target price on Oberoi Realty to Rs 1,793 by almost 15% from Rs 2,101 while maintaining its ‘Hold’ rating on the stock. Significant weakness in housing volumes led to a cut in the 12-month price target and also raised concerns about future sales growth. This has further led the broker to cut down the NAV (net asset value) premium to 35% from 60% earlier.
Nuvama on Oberoi Realty: New sales plummet
The company’s new sales tanked 52% year-on-year and 56% sequentially in the last quarter of the financial year 2024-25 because of no new launches during the quarter. In the same quarter a year ago, the sales were pushed by the launch of a new tower in the Goregaon, Maharashtra, located project.
Another thing which went wrong was the huge drop in sales og carpet area. Oebroi Realty’s capet area sale plummeted 69% YoY and 79% quarter-on-quarter to 0.14 million square feet (msf) in Q4FY25. It sold a total of 78 units for the reporting quarter, as against 554 in the previous quarter and 227 in Q4FY24.
Nuvama on Oberoi Realty: Focus on new launches
Now, the eyes have turned to new launches for FY25 as the financial year witnessed the company adding many new projects (including redevelopment projects) across various micro-markets in the MMR (Mumbai Metropolitan Region). “The timely launch of these projects, along with the much-anticipated foray in the Gurugram market, would be essential to maintain the sales momentum going ahead,” said Nuvama.
Nuvama on Gorej Realty: Still some positives
Given this, the company ended FY25 with best-ever pre-sales of Rs 5,270 crore, an increase of 31% YoY. By area, sales stood at 1.3 msf, which were up 19% YoY. OBER sold 928 units in FY25 versus 705 units in FY24. While the average ticket size remained flat YoY at Rs 5.7 crore, average realisation was up 10% YoY to Rs 41,094/sft in FY25.
However, there are some positive aspects as well, like average realisations surged 58% YoY and 114% QoQ to Rs 62,117/sft in Q4FY25, whereas the average ticket size was up 41% YoY and jumped 2.16 times QoQ to Rs 10.9 crore.
“We forecast management shall focus on project addition and a quick launch turnaround to take advantage of demand dynamics,” said Nuvama.