Report

RESULTS REVIEW 3QFY16
18 JAN 2016
Oberoi Realty
BUY
INDUSTRY
REAL ESTATE
CMP (as on 18 Jan 2016)
Rs 246
Target Price
Rs 411
Nifty
7,351
Sensex
24,188
KEY STOCK DATA

Bloomberg
OBER IN
No. of Shares (mn)
339
MCap (Rs bn) / ($ mn)
86/1,232
6m avg traded value (Rs mn)
62
STOCK PERFORMANCE (%)

52 Week high / low
Absolute (%)
Relative (%)
Rs 334/209
3M
6M
12M
(10.0)
(12.4)
(8.3)
1.1
2.7
5.7
SHAREHOLDING PATTERN (%)

Promoters
FIs & Local MFs
FIIs
Public & Others
72.56
0.90
21.20
5.34
Source : BSE
Parikshit Kandpal
parikshitd.kandpal@hdfcsec.com
+91-22-6171-7317
Beating the slowdown

OBER delivered a stellar 3QFY16, with revenue
coming 13.5% ahead of estimates. Net profit was
subpar and came in 18.9% below expectations. The
Esquire project area recognized was at FY11
realization, resulting in project contributing EBIDTA
margins of 38% vs. 58% historically for other
projects. Excluding Borivali, OBER achieved Rs 2bn of
pre-sales vs. Rs 1.1bn during 2QFY16.
The Borivali project continues to surprise with
24/68% of the total/launched area sold within three
months. OBER operates a well-balanced business
model with the residential and commercial segments
contributing 60% and 40% to our NAV. In case of a
slowdown in residential sale, cash flows from
commercial projects lend visibility to earnings.
Over the next four quarters, we see multiple triggers
panning out with (1) The Worli launch during
4QFY16E, (2) Subsequent phases of Mulund and
Borivali, and (3) Goregaon Phase 3 during 1QFY17E.
Maintain BUY with SOTP of Rs 411/sh.
Highlights of the quarter
Strong overall performance: In one of the best
quarters for the company, OBER witnessed strong

pre-sales (1.1mn sqft, Rs 17.7bn), strong
collections (Rs 5.3bn) and all-time high realisations
across projects. Overall spend on approvals stood
at Rs 4bn. While construction started on the
Borivali project, the show flat in Worli is expected
to be ready by Jan-16, followed by 4QFY16E
launch. New leases stood at ~46,000 sqft.
Pre-sales mixed response: The Borivali project
continues to surprise with area/pre-sales hitting

~0.95mnsqft/Rs 15.7bn. Mulund/Exquisite had a
muted response, while Esquire saw strong pickup.
New inventory in Borivali and Goregaon may have
cannibalised Exquisite project sales.
Balance sheet strong, net D/E at 0.04x: OBER has
increased net D/E from 0.01x to 0.04x as of end

3QFY16. This gives enough headroom to acquire
new land parcels. The company is going slow in
adding new office space.
Financial Summary (Consolidated)

(Rs mn)
Net Sales
EBITDA
APAT
Diluted EPS (Rs)
P/E (x)
EV / EBITDA (x)
RoE (%)
3QFY16
7,819
3,278
2,094
4.4
3QFY15
2,171
1,266
792
4.4
YoY (%)
260.2
159.0
164.2
1.1
2QFY16 QoQ (%)

1,892
313.2
1,090
200.6
724
189.0
4.1
8.0
FY15
9,227
5,138
3,171
9.3
26.3
17.4
7.0
FY16E
13,731
8,029
5,173
15.2
16.1
10.3
10.3
FY17E
21,781
13,079
8,799
25.9
9.5
5.8
15.0
FY18E
30,378
18,143
12,785
37.7
6.5
3.8
18.6
Source : Company, HDFC sec Inst Research
HDFC securities Institutional Research is also available on Bloomberg HSLB <GO>& Thomson Reuters
OBEROI REALTY : RESULTS REVIEW 3QFY16
OBERs revenue, EBIDTA and

net profit grew 260.2%,
159% and 164.2% YoY,
ahead of estimates by
13.5%, (15.8%), and (18.9%),
respectively
EBIDTA margins contracted
1,638bps owing to 78%
revenue contribution from
Esquire, with ~38% EBIDTA
margins vs. 58% for the
balance revenue
Quarterly Financial Snapshot (Consolidated)

Particulars
Net Sales
Material Expenses
Employee Expenses
Other Operating Expenses
EBITDA
Interest Cost
Depreciation
Other Income
PBT
Tax
Net Profit
3QFY16
7,819
(4,160)
(156)
(225)
3,278
(0)
(124)
84
3,239
(1,145)
2,094
3QFY15
2,171
(640)
(132)
(133)
1,266
(1)
(99)
25
1,192
(400)
792
YoY (%)
260.2
550.3
18.1
68.8
159.0
(60.0)
25.4
231.5
171.7
186.6
164.2
2QFY16
1,892
(579)
(139)
(84)
1,090
(1)
(122)
116
1,084
(359)
724
QoQ (%)
313.2
618.0
12.8
168.5
200.6
(60.0)
0.9
(27.6)
198.8
218.6
189.0
3QFY16
3QFY15
YoY (%)
2QFY16
QoQ (%)
53.2
2.0
2.9
41.9
35.4
26.8
29.5
6.1
6.1
58.3
33.5
36.5
2,373
(410)
(326)
(1,638)
183
(973)
30.6
7.3
4.4
57.6
33.2
38.3
2,258
(533)
(155)
(1,570)
220
(1,151)
3QFY16
1.1
17,714
15,979
3QFY15
0.15
2,952
19,952
YoY (%)
649.3
500.1
(19.9)
2QFY16
0.1
1,158
18,492
QoQ (%)
1,669.6
1,429.1
(13.6)
Source: Company, HDFC sec Inst Research
Esquire project hit revenue

recognition for the first time
during 3QFY16. The margins
booked were low as floors
which were sold at FY11
realization of Rs 13,00014,000/sqft hit revenue
recognition. Current
realization of Rs 18,00020,000/sqft will lead to
margin expansion
Pre-sales momentum
remained muted in Exquisite
while picking up in Esquire.
Borivali strong traction
continues. Average
realisation stood at Rs
15,979/sqft
Margin Analysis (Consolidated)

Material Expenses
Employee Expenses
EBITDA
Tax Rate
Net Margin
Pre-sales Trend
Pre-sales trend
Sales Volume (mn sqft)
Sales Value (Rs mn)
Average Realization (Rs/sqft)
Page | 2
Pre-sales momentum mixed

FY16-17E pre-sales well
diversified across macromarkets
The Borivali project has delivered strong pre-sales
for OBER, with 24% of the total project sold within

three months of the launch. OBER achieved
0.95mn sqft in pre-sales with a value of Rs 15.6bn
and average realisation of Rs 16,548/sqft. The
company received the commencement certificate
for the project and work has already started. The
total collection is about 18.5%.
Exquisite saw sharp quarterly drop in pre-sales
with six flats getting sold vs. the average

expectations of 25. The competition from release
of extra inventory in Esquire and Borivali new
launch may have cannibalised sales.
FY17-18E: Pre-sales will be diversified across
different micro-markets and projects. Opening up

of higher floors in the Mulund project, launch of
the Goregaon Phase 3 (1.7mn sqft) and a
subsequent phase at Borivali will be the key presales drivers for OBER.
The success of the Borivali launch is attributable to

Goregaon Garden City Phase
3 launch to drive FY17E
volume
Borivali to be the key

volume driver for FY16E.
Already achieved about
~0.95mn sqft during 3QFY16
OBERs strong brand positioning, and lack of a

large (~25 acres) gated community project with
modern amenities in the macro-market. The ticket
size of ~Rs 25mn found flavor with buyers.
Worli, Exquisite and the residual area in Esquire
(JVLR) will be revenue drivers over the FY17-18E

period. Borivali and Mulund will boost revenue in
FY17E and FY18E, respectively.
For the Mulund project, OBER has received the
commencement certificate and work has started.

It has also opened another 10 floors in Eternia, but
the project received muted response. OBER
expects Mulund to start contributing to revenues
from 2HFY17E.
Barring the time when there were no new
launches,
OBERs strong pre-sales record
indicates that it is well placed to gain market
share in a weak market, maintain price premium
in a stable market and improve sales velocity in
ready-to-move-in/ultra luxury projects in a
positively trending market. However, Oasis Worli
will be the acid test for the company.
The Worli project show flat will be ready by end of

Jan-16 and OBER has ~50 leads in advance stages.
The company opened higher floors in Esquire with

20-25, 4BHKs. The new opening received a good
response with nine flats already off the market.
Pre-sales Trend
We expect pre-sales to
average about ~1.6mn
sqft/yr over FY16-18E
Project Name
Goregaon - Garden City
JVLR - Prisma, Maxima
Worli - Oasis Residential
Mulund - Exotica
Oberoi Borivali
Area sold (mn sqft)
FY10
0.5
0.5
-
1.0
FY11
0.6
0.1
-
0.7
FY12
0.5
0.2
-
0.7
FY13
0.4
0.1
-
0.5
FY14
0.2
0.1
0.3
FY15
0.2
0.1
0.7
1.0
FY16E
0.1
0.1
0.1
1.0
1.2
FY17E
0.9
0.1
0.1
0.4
0.3
1.8
FY18E
0.4
0.1
0.1
0.4
0.8
1.8
Page | 3
OBER has Rs 41.2bn of

revenues yet to be
recognised and Rs 28.8bn of
cash to be collected from
existing pre-sales
Project
Oberoi Esquire*
Oberoi Exquisite*
Oberoi Oasis$
Oberoi Priviera@
Oberoi Prisma^
Oberoi Eternia&
Oberoi Enigma&
Oberoi Skycity!
Total
Area (mn
sqft)
2.0
1.5
1.8
0.0
0.3
1.7
1.6
4.0
13.0
Area sold as
of 3QFY16
(mn sqft)
1.1
1.3
0.1
0.0
0.1
0.4
0.3
0.9
4.4
Inventory as
Sales Value
of 3QFY16
(Rs mn)
(mn sqft)
0.9
15,498
0.2
20,594
1.6
4,224
0.0
928
0.1
2,265
0.4~
6,400
0.2~
4,242
0.5~
15,672
4.0
70,322
Avg.
realisation
(Rs/sqft)
14,085
15,799
29,448
65,816
17,733
15,046
14,880
16,548
16,054
Balance revenues Cash to be

to be recognised received
(Rs mn)
(Rs mn)
39%
9,379
5,395
100%
471
<20%
4,224
1,314
100%
0
42%
1,308
1,144
<20%
6,400
4,558
<20%
4,242
3,123
<20%
15,672
12,780
41,224
28,786
PoCM
(%)
Source: Company, HDFC sec Inst Research * Goregaon, $ Worli, @ Khar, ^JVLR, &Mulund. ! Borivali, ~ inventory of area opened for sale
Page | 4
A healthy balance sheet,

superior land bank and
strong execution capability
places OBER in top quartile
vs. peers
Enjoying a dominant competitive positioning
OBER is best placed amongst its western peers on

account of its superior land bank quality, access to
finance, a healthy balance sheet and high
potential for successful foray in newer markets.
The micro factors are supported by strong

execution, quality construction and management
bandwidth. We highlight our findings in the exhibit
below to arrive at an overall competitive
positioning.
Overall Competitive Positioning Of Real Estate Developers

Macro*
Business$
competitive competitive
- 30%
- 25%
weight
weight
Land
bank &
pricing 20%
weight
Balance
sheet
positioning Overall
- 25%
weight
Comments
Oberoi
Top quartile with minimal net debt, higher return

ratios and strong cash flows
Godrej
A top quartile on macro competitive, while midquartile on all other parameters. High leverage is
the key overhang. We rate it mid-quartile
HDIL
Middling in all parameters
Hiranandani
Overall a mid-quartile
Raheja
Middling in all parameters
Sunteck
Overall a mid-quartile on back of low leverage, high

return ratios
Wadhwa
Overall a mid-quartile
Kolte Patil
Mid-quartile on all parameters
Source: Company, HDFC sec Inst Research , *Macro affordability, brand; $Businesss Competitive Execution, vendor tie-up, construction quality
On overall competitive positioning, we find that

the top real estate players in the western markets
are Oberoi, Godrej, Sunteck and Kolte Patil. OBER,
with the right mix of attractive land bank, superior
execution capability, branding, balance sheet
strength and underlying business fundamentals,

remains best poised amongst its peers.
Although their scores differ, we see limited

differentiation on an overall basis.
Page | 5
Key assumptions and estimates

We expect OBER to deliver
17.9% pre-sales CAGR over
FY15-18E. Realisation to
remain muted
Summary Of Key Assumptions And Estimates

FY16E
Growth (%)
FY16E FY17E FY18E
Comments
Volume assumptions
Residential (mn sqft)
Esquire has hit revenue

recognition during 3QFY16,
Worli/Mulund in 2HFY17E
and Borivali in FY18E
Estimates
FY17E FY18E
1.2
1.8
1.7
18.8
47.9
Average rate (Rs/sqft)
17,946 18,448 17,248
4.9
2.8
Pre Sales value (Rs mn)
22,051 33,526 29,026
24.6
52.0
Strong volume growth contributed by Goregaon,

(7.4) Mulund and Borivali launches, which have a total
saleable area of ~10mn sqft
With high unaffordability and new supply, we expect
(6.5)
the realisation to remain muted.
17.9% FY15-18E sales CAGR largely contributed by
(13.4)
new launches
Rental Income
Area for lease (msf)
1.9
1.9
1.9
15.2
Average occupancy (%)
67.4
76.7
88.4
1,503
933
Average Rental
(Rs/sqft/month)
140
144
151
(1.3)
2.3
1,665
2,004
2,925
13.4
20.3
10,827 18,488 25,186
65.5
70.8
Rental income (Rs mn)
Addition of Commerz-II results in increased leasable

area
Occupancy to gradually pick up during FY17E owing
1,167
to slower leasing momentum in Commerz-II
Lease rentals growth to be muted, new lease rentals
5.0
to be in line with re-negotiated lease rentals
25.8% FY15-18E lease rentals revenue CAGR on back
46.0
of incremental leasing in Commerz-II
-
Earnings forecast
Sales real estate (Rs mn)
Income from hospitality
1,239
1,289
2,266
1.8
4.1
Annuity assets
1,665
2,004
2,925
13.4
20.3
13,731 21,781 30,378

8,029 13,079 18,143
48.8
56.3
58.6
62.9
59.7
279.0
157.5
2
2
8,799 12,785
5.1
63.1
(90.5)
70.1
Total
EBIDTA (Rs mn)
We have estimated 59.2%

EPS CAGR over FY15-17E
EBIDTA Margin (%)

Net interest expense*
PAT (Rs mn)
58.5
19
5,173
60.0
56.7% revenue CAGR for FY15-18E. FY16E - Esquire

36.2 key driver, FY17E - Worli and Mulund, FY18E Borivali key revenue driver
Addition of Worli hotel to drive 23% FY15-18E
75.8
income CAGR
Mix of volume and lease rental renewal to drive
46.0 25.8% FY15-18E income CAGR. Commerz-II lease
pickup key volume driver
39.5 48.7% revenue CAGR for FY15-18E
38.7 52.3% CAGR for FY15-18E
Margin expansion during FY16E as Exquisite higher
(32.4) floors start contributing to revenues. with better
realisation, FY17E expansion owing to Worli
45.3 59.2% CAGR for FY15-18E
Page | 6
Cash Flows Forecast

Rs mn
Cash flows forecast
CFO ( a)
CFI (b)
FCF (a+b)
CFF (c)
Total change in cash (a+b+c)
FY16E
Estimates
FY17E
5,693
(1,863)
3,830
(2,076)
1,754
7,647
(523)
7,124
468
7,592
FY18E
Comments
8,008
450
8,457 Free cash flow to remain strong
(750)
7,708
Page | 7
Valuation: NAV target of Rs 411/sh

SOTP Valuation
Gross NAV
(Rs mn)
Rs/
Share
Goregaon
19,103
56
JVLR
Worli Residential
Mulund
3,128
10,616
31
15,768
46
22,142
65
70,756
209
Westin Hotel
5,223
15
Worli Hotel
3,125
Total Hotel
8,348
25
Location
Residential
Borivali
Total
Residential
Hotels
Commercial
Commerz-All
24,855
71
Phases
Oberoi Mall
8,753
26
Worli
3,745
11
Commercial
Total
37,353
110
Commercial
Grand Total
116,458
343
Source: Company, HDFC sec Inst
Research
We have adopted the DCF methodology to arrive
at OBERs NAV. We value the residential real

estate business at Rs 209/sh, hotels at Rs 25/sh,
commercial annuity assets at Rs 110/sh, social
infrastructure at Rs 9/sh, other assets at Rs 37/sh
and net debt at (Rs 21) to arrive at the total SOTP
valuation of Rs 411/sh.
We dont assign any NAV discount to OBER, as
we have only valued the projects that have
visibility over the next five years. For land bank
beyond that period, we ascribe 1x P/BV for
invested equity.
Our valuation also incorporates Glaxo Worli and
advances given by OBER to Oasis Worli. Oasis

Worli will be launched during 4QFY16E and
advances (Rs 10.5bn) will be returned to OBER.
This will reflect in higher net cash levels that will
impact valuation positively.
There is some visibility emerging around Glaxo
Worli; we estimate about ~0.6mn sqft of
residential saleable area or ~1.6mn sqft of
commercial area. As of now, we have valued Worli
Glaxo on land value and have not ascribed any
development margins on the same.
Sum Of The Parts

Gross NAV Residential
Gross NAV Hotels
Gross NAV
Commercial
Social Infra
Other Assets
Less: Net Debt
NAV
Rs mn
70,756
8,348
37,353
3,134
12,701
(7,283)
139,576
(Rs/share) Comments
209 DCF-based NAV.
25 8x FY17E EV/EBIDTA
110 DCF-based NAV
9 Discounting at 11% cap rate viz. school, hospital etc
Worli Glaxo land value discounted at 14% Rs 5.1bn, Oasis Worli
37 advances of Rs 10.5bn valued at Rs 5.8bn. Investments in other
projects at 1x P/BV, viz. Sangam city, Juhu hotel etc.
(21) Net debt end FY17E
411
Page | 8
Real estate development: NAV calculation

methodology
We have divided OBERs entire land bank into
residential/commercial projects (based on the

information given by the company).
We have arrived at the sale price/sqft and the

anticipated sales volumes for each project based
on our discussions with industry experts.
We have deducted the cost of construction based

on our assumed cost estimates, which have been
arrived on after discussions with the experts.
We have further deducted marketing and other
costs, which have been assumed at 5% of the sales

revenue.
We have then deducted income tax based on the

tax applicable for the project.
The resultant cash inflow at the project level have

Our base property price
assumption is at a 0-5%
premium to the current
prevailing prices on account
of OBERs brand pull
been discounted based on WACC of 14% (cost of

equity 14% based on beta of 1x & debt/equity
ratio of 0.2x). All the project-level NAVs have been
summed up to arrive at the final value of the
company.
For commercial office, we have discounted rentals
using 14% WACC for the forecasted period and

terminal value using the cap rate of 11%.
Social infrastructure created by OBER viz. school,

hospital, etc, have been discounted using a cap
rate of 11%.
Other assets have been valued at 1x P/BV of

invested equity.
From the NAV, we have deducted the net debt as

of FY17E to arrive at the final valuation of the
company.
Key valuation assumptions
In the exhibit below, we highlight our sales and

cost inflation forecasts. We expect property prices
to appreciate in line with WPI inflation, i.e. 5%,
and cost of construction to grow at 6%. We
forecast other costs including marketing, SGA and
employee cost at 5% of sales.
Base Case Assumptions (%)

Discount rate
Annual rate of inflation-sales price
Annual rate of inflation-cost of construction
Other costs marketing, SGA, employee cost (as
% of sales)
Tax rate (%)
14
5
6
5
33
In the exhibit below, we highlight our sale price
and construction cost forecasts. Our pricing

assumptions are moderate and at a 0-5% premium
to the current prevailing prices on account of
OBERs 15-20% brand premium vs. peer.
Base Price & Construction Cost Assumptions

Location
Goregaon
Worli
Mulund
JVLR
Borivali
Prices
Rs/sq ft
15,000
35,000
12,500
15,000
11,500
Cost
Rs/sq ft
5,500
8,500
5,000
5,000
4,500
Page | 9
1% increase in average
base sale price impacts our
NAV positively by 3.1%
Every 100bps increase in

sale price inflation impacts
our NAV positively by 5.3%
100bps increase in cost

inputs decreases our NAV
by 2.9%
NAV sensitivity analysis

Sensitivity to our assumption of property price
Sensitivity of NAV to changes in cost inflation
Our model is sensitive to changes in the
In our base case, we have assumed cost inflation
NAV Sensitivity To Change In Average Sale Price
NAV Sensitivity To Change In Cost Inflation
assumptions regarding property prices. For every

1% change in the base property prices, the NAV
will change by approximately 3.1%.
% change in sale
price
NAV/share (Rs)
Change in NAV (%)
(10)
(5)
10
284
(31.0)
348
(15.5)
411
-
475
15.4
538
30.9
Sensitivity of NAV to changes in sale inflation
In our base case, we have assumed annual sale

100bps increase in
discounting rate impacts
our NAV negatively by 4.7%
price inflation of 5%. For every 100bps increase in

the annual sale price inflation, the NAV will
increase by approximately 5.3%.
NAV Sensitivity To Change In Sales Inflation

Sales inflation
rates (%)
NAV/share (Rs)
Change in NAV (%)
373
(9.4)
390
(5.1)
411
-
433
5.3
450
9.5
to be 6%. For every 100bps increase in

construction cost inflation, the NAV will change by
approximately 2.9%.
Cost inflation rates (%)

NAV/share (Rs)
Change in NAV (%)
4
434
5.5
5
422
2.7
6
411
-
7
400
(2.9)
8
387
(5.9)
The combined impact of a 100bps increase in sale

price inflation and cost inflation will be a NAV
increase of 2.4%.
Sensitivity of NAV to changes in discount rate
In our base case, we have assumed a discount rate

of 14%. For every 100bps increase in the discount
rate, the NAV will fall by 4.9%.
NAV Sensitivity To Change In WACC

WACC rates (%)
NAV/share (Rs)
Change in NAV (%)
12
454
10.4
13
431
4.9
14
411
-
15
16
392
369
(4.7) (10.3)
Page | 10
Income Statement (Consolidated)

Y/E March (Rs mn)
Net Sales
Growth (%)
Material Expenses
Employee Expenses
EBIDTA
EBIDTA (%)
EBIDTA Growth (%)
Other Income
Depreciation
EBIT
Interest
PBT
Tax
PAT
Minority Interest
EO items (net of tax)
APAT
APAT Growth (%)
EPS
EPS Growth (%)
FY14
7,985
(23.8)
2,897
442
298
4,348
54.5
(29.0)
571
272
4,647
3
4,644
1,533
3,111
0
3,111
(38.4)
9.2
(38.4)
Balance Sheet (Consolidated)

FY15
9,227
15.6
3,148
527
414
5,138
55.7
18.2
175
403
4,910
18
4,892
1,721
3,171
0
3,171
1.9
9.3
1.9
FY16E
13,731
48.8
4,741
618
343
8,029
58.5
56.3
281
505
7,806
19
7,787
2,614
5,173
0
5,173
63.1
15.2
63.1
FY17E
21,781
58.6
7,449
762
490
13,079
60.0
62.9
614
575
13,119
2
13,117
4,318
8,799
0
8,799
70.1
25.9
70.1
FY18E
30,378
39.5
11,020
759
456
18,143
59.7
38.7
900
619
18,424
2
18,422
5,637
12,785
0
12,785
45.3
37.7
45.3
Y/E March (Rs mn)

SOURCES OF FUNDS
Share Capital
Reserves
Total Shareholders Funds
Minority Interest
Long-term Debt
Short-term Debt
Total Debt
Deferred Taxes
Long-term Provisions & Others
TOTAL SOURCES OF FUNDS
APPLICATION OF FUNDS
Net Block
CWIP
Goodwill
Investments, LT Loans & Advs
Inventories
Debtors
Cash & Equivalents
ST Loans & Advances, Others
Total Current Assets
Creditors
Other Current Liabilities & Provns
Total Current Liabilities
Net Current Assets
Misc Expenses & Others
TOTAL APPLICATION OF FUNDS
FY14
FY15
FY16E
FY17E
FY18E
3,282
40,682
43,964
761
761
220
44,944
3,284
43,060
46,344
9,016
9,016
242
55,602
3,394
51,065
54,459
4,016
4,016
242
58,717
3,394
59,349
62,743
5,000
5,000
242
67,985
3,394
71,386
74,780
5,000
5,000
242
80,022
6,658
4,337
2,654
496
16,491
862
4,997
18,375
40,725
9,138
789
9,926
30,799
44,944
10,148
218
2,654
0.1
34,817
828
2,937
19,598
58,180
14,758
841
15,599
42,582
1
55,602
11,393
613
2,654
0.1
35,943
1,129
4,691
20,798
62,560
17,593
909
18,503
44,057
12,568
2,654
0.1
35,565
1,541
12,282
22,298
71,685
17,945
978
18,923
52,763
0
67,985
12,400
2,654
0
39,476
2,323
19,990
23,748
85,536
19,521
1,047
20,568
64,968
80,022
58,717
Page | 11
Cash Flow (Consolidated)

Y/E March (Rs mn)
PBT before minority
Non-operating income & EO items
Taxes
Interest expenses
Depreciation
Working Capital Change
OPERATING CASH FLOW ( a )
Capex
Free cash flow (FCF)
Investments
Others
INVESTING CASH FLOW ( b )
Share capital Issuance
Debt Issuance
Interest expenses
Dividend
FINANCING CASH FLOW ( c )
NET CASH FLOW (a+b+c)
Non-operating and EO items
Closing Cash & Equivalents
Key Ratios (Consolidated)

FY14
FY15
4,644
4,892
(578)
(178)
(1,412) (1,531)
1
870
272
403
(8,100) (14,170)
(5,173) (9,712)
(482)
360
(5,655) (9,352)
88
45
7,542
-955
7,149
(551)
0
1
761
8,255
(0)
(552)
(768)
(768)
(8)
6,936
1,968 (3,327)
12,693
1,616
FY16E
7,787
(281)
(2,614)
19
505
278
5,693
(2,145)
3,549
0
281
(1,863)
3,245
(5,000)
(19)
(303)
(2,076)
1,754
4,691
FY17E
13,117
(614)
(4,318)
2
575
(1,114)
7,647
(1,138)
6,510
0
614
(523)
0
984
(2)
(515)
468
7,592
12,282
FY18E
18,422
(900)
(5,637)
2
619
(4,498)
8,008
(450)
7,558
0
900
450
0
0
(2)
(748)
(750)
7,708
19,990
PROFITABILITY (%)
GPM
EBITDA Margin
APAT Margin
RoE
Core RoCE
RoCE
EFFICIENCY
Tax Rate (%)
Asset Turnover (x)
Inventory (days)
Debtors (days)
Payables (days)
Cash Conversion Cycle (days)
Debt/EBITDA (x)
Net D/E
Interest Coverage
PER SHARE DATA
EPS (Rs/sh)
CEPS (Rs/sh)
DPS (Rs/sh)
BV (Rs/sh)
VALUATION
P/E
P/BV
EV/EBITDA
OCF/EV (%)
FCF/EV (%)
Dividend Yield (%)
FY14
FY15
FY16E
FY17E
FY18E
63.7
54.5
39.0
7.3
10.8
10.8
65.9
55.7
34.4
7.0
9.8
9.8
65.5
58.5
37.7
10.3
13.7
13.7
65.8
60.0
40.4
15.0
20.7
20.7
63.7
59.7
42.1
18.6
24.9
24.9
33.0
0.2
661
32
445
248
0.2
(1.0)
1,499
35.2
0.2
1,015
33
473
576
1.8
1.2
279
33.6
0.2
940
26
430
537
0.5
(0.1)
422
32.9
0.3
599
22
298
324
0.4
(0.6)
7,462
30.6
0.4
451
23
225
249
0.3
(0.8)
10,480
9.2
10.0
2.3
129.6
9.3
10.5
2.3
136.6
15.2
16.7
0.8
160.5
25.9
27.6
1.3
184.9
37.7
39.5
1.9
220.4
26.8
1.9
18.2
(0.1)
(7.1)
0.9
26.3
1.8
17.4
(0.1)
(10.4)
0.9
16.1
1.5
10.3
0.1
4.3
0.3
9.5
1.3
5.8
0.1
8.5
0.5
6.5
1.1
3.8
0.1
11.0
0.8
Page | 12
RECOMMENDATION HISTORY
Oberoi Realty
500
Date
12-Jan-15
19-Jan-15
29-Jul-15
3-Nov-15
7-Dec-15
18-Jan-16
TP
450
400
350
300
CMP
269
269
260
282
256
246
Reco
BUY
BUY
BUY
BUY
BUY
BUY
Target
328
328
339
339
411
411
250
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
BUY
Mar-15
150
Feb-15
Rating Definitions
Jan-15
200
: Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL
: Where the stock is expected to deliver less than (-)10% returns over the next 12 month period
Page | 13

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RESULTS REVIEW 3QFY16

CMP (as on 18 Jan 2016)

KEY STOCK DATA

No. of Shares (mn)

MCap (Rs bn) / ($ mn)

6m avg traded value (Rs mn)

STOCK PERFORMANCE (%)

SHAREHOLDING PATTERN (%)

Beating the slowdown

Highlights of the quarter

Strong overall performance: In one of the best

quarters for the company, OBER witnessed strong

Pre-sales mixed response: The Borivali project

continues to surprise with area/pre-sales hitting

Balance sheet strong, net D/E at 0.04x: OBER has

increased net D/E from 0.01x to 0.04x as of end

Financial Summary (Consolidated)

2QFY16 QoQ (%)

Source : Company, HDFC sec Inst Research

OBEROI REALTY : RESULTS REVIEW 3QFY16

OBERs revenue, EBIDTA and

Quarterly Financial Snapshot (Consolidated)

Source: Company, HDFC sec Inst Research

Esquire project hit revenue

Margin Analysis (Consolidated)

OBEROI REALTY : RESULTS REVIEW 3QFY16

Pre-sales momentum mixed

The Borivali project has delivered strong pre-sales

for OBER, with 24% of the total project sold within

Exquisite saw sharp quarterly drop in pre-sales

with six flats getting sold vs. the average

FY17-18E: Pre-sales will be diversified across

different micro-markets and projects. Opening up

The success of the Borivali launch is attributable to

Borivali to be the key

OBERs strong brand positioning, and lack of a

Worli, Exquisite and the residual area in Esquire

(JVLR) will be revenue drivers over the FY17-18E

For the Mulund project, OBER has received the

commencement certificate and work has started.

Barring the time when there were no new

The Worli project show flat will be ready by end of

The company opened higher floors in Esquire with

Source: Company, HDFC sec Inst Research

OBEROI REALTY : RESULTS REVIEW 3QFY16

OBER has Rs 41.2bn of

Balance revenues Cash to be

OBEROI REALTY : RESULTS REVIEW 3QFY16

A healthy balance sheet,

Enjoying a dominant competitive positioning

OBER is best placed amongst its western peers on

The micro factors are supported by strong

Overall Competitive Positioning Of Real Estate Developers

Top quartile with minimal net debt, higher return

Middling in all parameters

Middling in all parameters

Overall a mid-quartile on back of low leverage, high

Mid-quartile on all parameters

On overall competitive positioning, we find that

strength and underlying business fundamentals,

Although their scores differ, we see limited

OBEROI REALTY : RESULTS REVIEW 3QFY16

Key assumptions and estimates