Oberoi Realty's NCR launch positions FY27 pre-sales to cross Rs 100 billion

Investment View and Growth Outlook

Motilal Oswal Financial Services expects a sharp acceleration in Oberoi Realty’s FY27 pre-sales, led by the company’s entry into the NCR market, an extensive launch pipeline and increased business-development activity. The broker believes the response to the NCR project and faster business development improve the company’s medium-term growth visibility.

Motilal Oswal retained its Neutral rating and Rs 2,000 sum-of-the-parts target price. It also expects the annuity and hospitality businesses to scale up, supported by planned additions, while Oberoi Realty’s balance sheet remains among the strongest in its peer group.

Pre-sales and Launch Pipeline

In 1QFY27, Oberoi Realty reported pre-sales of Rs 10.5 billion, down 36 per cent year on year but broadly in line with Motilal Oswal’s Rs 9.9 billion estimate. Sustenance sales supported the quarter. Bookings commenced at the Carter Road Oceanic project, contributing Rs 1.5 billion, or about 14.5 per cent of quarterly pre-sales.

The company recorded Rs 81 billion of pre-sales in July 2026 at its maiden NCR project. The FY27-FY28 launch pipeline includes Fairview at Malabar Hill, Aadarsh Nagar and Peddar Road redevelopment, Alibaug, Tardeo, Mulund, and new phases at Forestville, OGC Thane and NCR.

Motilal Oswal increased its FY27 pre-sales estimate to about Rs 137 billion, implying 154 per cent year-on-year growth. It forecasts Rs 111 billion in FY28, with the decline from FY27 reflecting the unusually high FY27 base and staggered NCR sales.

1QFY27 Financial Performance

Reported financial performance was stronger year on year. Revenue increased 32 per cent to Rs 13 billion, EBITDA grew 41 per cent to Rs 7.3 billion and EBITDA margin was 56.4 per cent. PAT rose 29 per cent to Rs 5.4 billion.

However, quarterly revenue was 14 per cent below Motilal Oswal’s estimate, EBITDA was 11 per cent below estimate and PAT was 10 per cent below estimate. EBITDA margin exceeded the estimate by 193 basis points.

Annuity and Hospitality Businesses

The annuity portfolio remains an important earnings support. Rental income grew 18 per cent year on year to Rs 3.3 billion in 1QFY27. Occupancy in all three Commerz towers was 96-100 per cent, while Sky City Mall occupancy improved to 82 per cent from 72 per cent in 4QFY26. Overall annuity occupancy stood at 95 per cent, with a 93 per cent EBITDA margin.

Motilal Oswal forecasts a 10 per cent FY26-FY28E annuity-income CAGR to Rs 13.5 billion, driven by occupancy gains and rental escalations.

Hospitality revenue rose 10 per cent year on year to Rs 469 million. RevPAR increased 8 per cent to about Rs 11,492, ARR rose 2 per cent to Rs 15,240 and occupancy was 75 per cent. The Ritz Carlton at Three Sixty West and Marriott Hotel in Borivali are expected to become operational within two years, supporting the broker’s projected 56 per cent hospitality-revenue CAGR to Rs 4.8 billion over FY26-FY28E.

Collections, Balance Sheet and Estimates

Collections fell only 8 per cent year on year to about Rs 9.2 billion despite the decline in pre-sales. Net debt to equity was 0.04 times. Motilal Oswal estimates a 27 per cent FY26-FY28 collection CAGR to Rs 69 billion and expects net cash of Rs 4.8 billion in FY27E and Rs 14.4 billion in FY28E.

The broker raised its FY27E revenue, EBITDA and adjusted PAT estimates by 6 per cent, 6 per cent and 5 per cent, respectively. For FY28E, it reduced the estimates by 1 per cent, 3 per cent and 4 per cent, respectively.

Valuation

Motilal Oswal values the residential operations using NAV at a 10.1 per cent WACC and applies a 35 per cent NAV premium to reflect the stronger business-development focus. The broker notes that its calculations indicate scope for a 50 per cent premium.

Operational commercial and retail assets are valued at a 7.5 per cent capitalisation rate, while under-construction and planned assets are valued at 8.0 per cent. Hospitality is valued at 18 times FY28E EV/EBITDA.