Oberoi Realty: Will ‘Kolshet’ drive FY24 Pre-sales growth?

28 Nov 2023 , 11:56 AM

Recommendation: Add; Target price: Rs 1315

 

Oberoi Realty (OBER) recently announced the launch of ‘Forestville’ at Kolshet Road in Thane, with a potential GDV of >Rs36bn (at launch price). This is OBER’s first new location launch since Borivali/Worli in 2015-16. While the competitive intensity in the micro market is very high, OBER has launched at an aggressive pricing and with luxury project specifications. With FY23 pre-sales declining 17% YoY, analysts of IIFL Securities expect this launch to drive ~30% growth YoY for FY24. Over the next 1-2 years, analysts of IIFL Securities see aggressive launches by OBER, with Pokaran (Thane) project lined up and an eventual foray into NCR markets. 

Much-awaited Kolshet project launched: 

OBER has announced the launch of ‘Forestville’ at Kolshet Road in Thane with a potential GDV of >Rs36bn (basis launch price). It currently has a 3 and 4BHK unit configuration with a total of five towers — of which three towers were launched. The base price for 3BHK (1,090 sq.ft)/4BHK (1,367 sq.ft) units were Rs18.7mn/Rs27.5mn respectively. Additionally, there is a floor-rise charge of Rs50/psf applicable for all floors. OBER has awarded the construction contract to L&T and the construction has commenced. RERA completion timeline for the project is stated as December 2029. 

Attractive pricing, but with an aggressive payment plan too: 

The all-inclusive price (incl. stamp duty, registration, GST, two car parking, advance maintenance) for 3BHK/4BHK units of Rs22.5mn/Rs30mn respectively is priced attractively at Rs20,600psf. However, that could also partly be due to its location, as Kalpataru, Godrej and Lodha have their projects much before ‘Forestville’. Overall while as an entry strategy, it is priced competitively, the payment plan is aggressive with ~10% of booking value due in the first 10 days/ 45% in the first 60 days. There are bank/developer subvention schemes available as well. 

Strong launch pipeline ahead; ADD: 

Over the recent few months, OBER has been relatively aggressive on business development (Gurgaon, Tardeo, Thane Pokaran and Peddar Road). Analysts of IIFL Securities expect the launch momentum to continue, with Pokaran (Thane) expected in Q4, followed by new phase launch in Goregaon. Analysts of IIFL Securities expect >35% Cagr in pre-sales (FY23-25) driven by launches and foray into newer markets like Gurgaon. Retain ADD rating with a revised target price of Rs1,315.