Oberoi Realty's NCR entry and project pipeline underpin pre-sales growth

Investment View and Target Price

In its September 15, 2026 company update on Oberoi Realty, Motilal Oswal Financial Services upgraded the stock to BUY and raised its sum-of-the-parts target price to Rs 2,130. The broker’s core thesis is that Oberoi Realty has entered a renewed growth phase through substantially higher business-development activity, larger project additions and wider geographic diversification.

Motilal Oswal believes the combination of strong project acquisitions, new launches across Mumbai Metropolitan Region (MMR) micro-markets and the company’s entry into NCR can support a significant re-rating of the residential business.

Business Development and Geographic Expansion

Oberoi Realty added six projects with estimated gross development value (GDV) of Rs 305 billion in the preceding year. Since FY24, project additions have totalled an estimated Rs 450 billion of GDV.

The broker expects the higher pace of business development to continue as the company pursues opportunities in MMR and NCR through a hub-and-spoke model that leverages its brand, execution capabilities and market knowledge. Oberoi Realty has moved beyond its earlier dependence on Mulund, Goregaon, Borivali, Worli and Jogeshwari through expansion into Thane, the Carter Road Oceanic project and NCR.

Launch Pipeline and Pre-Sales Outlook

The maiden NCR project, Three Sixty North, recorded pre-sales of Rs 81 billion in July 2026, which Motilal Oswal expects to drive FY27 pre-sales. The FY27-FY28 launch pipeline includes Fairview at Malabar Hill, Aadarsh Nagar, Peddar Road redevelopment, Alibaug, Tardeo and Mulund, together with new phases at Forestville, OGC Thane and NCR.

Commercial developments intended for strata sales in Mulund, Borivali and Bandra provide an additional pre-sales opportunity. On contributions from new launches and continuing sales, the broker forecasts pre-sales to grow at a 43 per cent CAGR over FY26-FY28 to Rs 111 billion. It expects multiple active projects to diversify sales and reduce operational concentration.

Balance Sheet and Capital Allocation

Motilal Oswal highlights Oberoi Realty’s conservative balance sheet. Net debt-to-equity was 0.04x as of Q1 FY27, while the company’s net debt-to-equity has generally remained below 0.3x across housing cycles.

Residential collections averaged about Rs 43 billion during FY24-FY26, nearly double the average of the preceding five years. The broker estimates collections will grow at a 27 per cent CAGR to Rs 69 billion by FY28, supported by pre-sales velocity and construction-linked collection milestones.

It forecasts net cash of Rs 5 billion in FY27 and Rs 14.7 billion in FY28 despite planned capital expenditure, supporting accelerated project acquisitions. Management intends to retain annuity assets rather than pursue a REIT structure, seeking recurring cash flows while allocating capital across residential, commercial and hospitality businesses.

Financial Outlook

The broker expects newer annuity assets and improving occupancy to aid profitability. Hospitality revenue is estimated to grow at a 56 per cent CAGR to Rs 4.8 billion by FY28 as the Ritz-Carlton at Three Sixty West and Marriott Hotel at Sky City, Borivali commence operations by FY27-FY28. However, gradual occupancy ramp-up at these new hotels is expected to lower hospitality EBITDA margin to 33 per cent in FY27E and 28 per cent in FY28E.

Valuation Framework

Motilal Oswal values the residential business on a NAV basis using a 10.1 per cent WACC and assigns a 35 per cent NAV premium for prospective project acquisitions. Including commercial assets expected to be sold on a strata basis increases NAV by 9 per cent.

The annuity portfolio is valued at 7.5-8.0 per cent capitalisation rates and hospitality at 18x FY28E EV/EBITDA. The broker argues that the residential segment’s embedded one-year forward EV/EBITDA of about 9x is below its five-year average of about 17x.

Its 60 per cent potential NAV-premium calculation implies 15x embedded EV/EBITDA, supporting its view of further upside if Oberoi Realty delivers the anticipated pre-sales growth, diversification and execution.