oberoi realty ltd Management discussions


Global economy

The global economy in FY 2021-22 faced significant headwinds amid new waves of COVID-19 infections, persistent labour market challenges, lingering supply-chain challenges and rising inflationary pressures. Despite many such challenges, global economy expanded by 5.5% in 2021.

This robust growth in global economy in 2021 was driven by strong consumer spending and some uptake in investment, with trade in goods surpassing pre-pandemic levels and even marked the highest growth rate in more than four decades. Despite the momentum for growth, the United States and the European Union slowed considerably by the end of 2021, as the effects of monetary and fiscal stimulus began to recede and major supply- chain disruptions emerged. Rising inflationary pressures in many economies are posing additional risks to recovery.

Indian economy

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. Government of India has launched the Make in India initiative with an aim to boost the countrys manufacturing sector and increase the purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. The Government of India, under its Make in India initiative, is trying to boost the contribution made by the manufacturing sector with an aim to take it to 25% of the GDP from the current 17%. Besides, the Government has also come up with the Digital India initiative, which focuses on three core components: the creation of digital infrastructure, delivering services digitally and increasing digital literacy.

Under PM GatiShakti Master Plan, the National Highway Network will develop 25,000 kilometers of new highways network which will be worth 20,000 crore (US$ 2.67 billion) in FY 2022-23. Increased government expenditure is expected to attract private investments, with a production-linked incentive scheme providing excellent opportunities. Consistently proactive, graded and measured policy support is anticipated to boost the Indian economy.

India is the third largest unicorn base in the world with over 83 unicorns collectively valued at US$ 277.77 billion, as per the Economic Survey. By 2025, India is expected to have 100 unicorns, which will create ~1.1 million direct jobs according to the Nasscom-Zinnov report Indian Tech Start-up.

Indias nominal gross domestic product (GDP) at current prices is estimated to be at 232.15 trillion (US$ 3.12 trillion) in FY 2021-22.

According to data from the Department of Economic Affairs, as of March 31, 2022, foreign exchange reserves in India was US$ 607.3 billion, which is equivalent to 12 months of merchandise imports in FY 2021-22 or 98.8% of outstanding external debt. Indias merchandise exports touched a record $418 billion in FY 2021-22, exceeding the governments target by about 5% and recording a 40% growth over the previous year.

The gross Goods and Services Tax (GST) revenue collection stood at 1.42 trillion in March 2022. This was higher by 15% over previous year. Total gross GST revenue collection in FY 2021-22 stood at 14.90 trillion.


Indias real estate sector is witnessing a healthy increase in demand in 2022 and this momentum is expected to hold for the rest of the year. From commercial spaces to the residential market, the overall market outlook is a bright one for the real estate industry.

Despite pandemic exigencies, the sector has continued to show resilience and steady growth in 2021. Indias first wave of COVID-19 brought the sector to a relative standstill for a while. However, by the last quarter of 2020, the market had begun to pick pace, particularly owing to an increase in demand for residential spaces. The second wave of COVID-19 hit the sector just as it had begun to revive itself. Unlike the first wave, the ramifications of the second wave were not as prolonged or prominent. Vaccination drives and lowered infection rates infused optimism in the market. In addition, the festive season fed the sectors growth. Buoyed by these factors, the sector made a strong comeback.


The Mumbai property market that accounts for 10% of national volumes, 23% of sales and a third of the margins, is on the cusp of a historic upcycle on all fronts, having already hit a decadal high of new or primary sales in 2021 despite the pandemic induced disruptions.

This also has the city civic body BMC netting around a whopping 14,200 crore in 2021 as building permission charges, up 5x from the previous year, as developers have been making a beeline to make it big in the countrys most profitable market.

We believe new and existing firms with strong balance sheets are poised to grow faster, given the limited period of opportunity to contract projects at low costs and their pace of growth depends on the success of their existing projects (cash flows), ability to grow (balance sheets), intent (growth track records), execution skills and pricing/product flexibility.

While the volume upcycle is underway in top seven cities, we believe a pricing upcycle will start soon.



As India awaits policy reforms to pick up speed, your Company firmly believes that the demand for Real Estate in a country like India should remain strong in the medium to long term. Your Companys well accepted brand, contemporary architecture, well designed projects in strategic locations, strong balance sheet and stable financial performance even in testing times make it a preferred choice for customers and shareholders. Your Company is ideally placed to further strengthen its development potential by acquiring new land parcels.


While the management of your Company is confident of creating and exploiting the opportunities, it also finds the following challenges:

• Unanticipated delays in project approvals;

• Availability of accomplished and trained labour force;

• Concerns due to ongoing pandemic situation;

• Increased cost of manpower;

• Rising cost of construction lead by increase in commodity prices;

• Growth in auxiliary infrastructure facilities; and

• Over regulated environment.


Your Company continues to capitalize on the market opportunities by leveraging its key strengths.

These include:

1. Brand Reputation: Enjoys higher recall and influences the buying decision of the customer. Strong customer connects further results in higher premium realizations.

2. Execution: Possesses a successful track record of quality execution of projects with contemporary architecture.

3. Strong cash flows: Has built a business model that ensures continuous cash flows from their investment and development properties ensuring a steady cash flow even during the adverse business cycles.

4. Significant leveraging opportunity: Follows conservative debt practice coupled with enough cash balance which provides a significant leveraging opportunity for further expansions.

5. Outsourcing: Operates an outsourcing model of appointing globally renowned architects/contractors that allows scalability and emphasizes contemporary design and quality construction - a key factor of success.

6. Transparency: Follows a strong culture of corporate governance and ensures transparency and high levels of business ethics.

7. Highly qualified execution team: Employs experienced, capable and highly qualified design and project management teams who oversee and execute all aspects of project development.


During the year FY 2021-22, your Company launched the 2nd Tower in Elysian project at Oberoi Garden City, Goregaon (East), Mumbai. Further, your Company entered into two Agreements, one for a plot of land at Peddar Road and another at Kolshet, Thane.


In FY 2021-22 your Company was able to sell nearly 1.32 million sq.ft. RERA carpet area as compared to approximately 1.06 million sq.ft, of RERA carpet area in FY 2020-21.

Financial performance overview

Analysis of consolidated financial statements for FY 2021-22 is provided below:

1. Key financial ratio analysis

A comparative table showing synopsis of FY 2021-22 versus FY 2020-21 of Key Financial Ratio is provided below:

Debtors Turnover Net Sales 21.33 16.88 Better control on Debtors
Average Debtors
Inventory Turnover Sales* 0.48 0.34 Due to purchase of FSI @ 50% premium in FY 2021-22
Inventory/Avg. Inventory
Interest Coverage Ratio EBIT 6.19 6.93 Increase in Interest expenses due to increase in Debt Equity ratio
Interest Expense
Current Ratio Current Assets 3.13 3.25 Due to increase in Borrowings
Current Liabilities
Debt Equity Ratio Total Debt 0.27 0.16 Increase in Debt for new Annuity assets and purchase of FSI @ 50% premium in FY 2021-22
Total Shareholders Equity
Operating Profit Margin (%) EBITDA 45.04% 49.67% Change in EBITDA is due to change in sales mix
Total Revenue
PBT Margin (%) Profit Before Tax 49.18% 44.22% Higher PBT margin is due to change in sales mix
Total Revenue
Net Profit Margin (%) Profit After Tax 38.04% 35.36% In line with increase in PBT Margin
Total Revenue
Return on Net Worth Net Income (PAT) 10.58% 8.21% In line with increase in PAT Margin
Average Shareholders Equity
Cash and Bank Balances/Net Worth Cash and Bank Balance including Mutual Funds and Fixed Deposits 11.48% 2.93% Due to increase in operating cash flow in FY 2021-22
Total Shareholders Equity

* Includes Revenue from Projects and Hospitality

2. Balance sheet analysis

A comparative table showing synopsis of FY 2021-22 versus FY 2020-21 of Balance Sheet is provided below:

(Rs. in Lakh)
Consolidated Balance Sheet As at March 31, 2022 As at March 31, 2021 INCREASE/ (DECREASE) % INCREASE/ (DECREASE)
Non-current assets 6,78,149.65 5,28,844.86 1,49,304.79 28.23%
Current assets 8,90,907.78 6,76,517.35 2,14,390.43 31.69%
Total 15,69,057.43 12,05,362.21 3,63,695.22 30.17%
Equity 10,41,613.99 9,36,914.30 1,04,699.69 11.17%
Non-current liabilities 2,43,043.69 60,043.56 1,83,000.13 304.78%
Current liabilities 2,84,399.75 2,08,404.35 75,995.40 36.47%
Total 15,69,057.43 12,05,362.21 3,63,695.22 30.17%

2.1 Non-current assets

(Rs. in Lakh)
Particulars As at March 31, 2022 As at March 31, 2021 INCREASE/ (DECREASE) % INCREASE/ (DECREASE)
Property, plant and equipment 19,733.08 20,673.11 (940.03) (4.55%)
Capital work in progress 3,29,740.10 1,97,973.16 1,31,766.94 66.56%
Investment properties 77,993.45 80,490.56 (2,479.11) (3.10%)
Intangible assets 237.80 197.31 40.49 20.52%
Intangible assets under development 12.83 15.02 (2.19) (14.58%)
Financial assets 1,81,101.79 1,54,246.36 26,855.43 17.41%
Deferred tax assets (net) 2,726.65 8,788.57 (6,061.92) (68.98%)
Other non-current assets 66,603.95 66,460.77 143.18 0.22%
Total 6,78,149.65 5,28,844.86 1,49,304.79 28.23%

2.2 Current assets

(Rs. in Lakh)
Particulars As at March 31, 2022 As at March 31, 2021 INCREASE/ (DECREASE) % INCREASE/ (DECREASE)
Inventories 5,03,608.05 4,66,260.80 37,347.25 8.01%
Financial assets
(i) Investments
(a) Investments in mutual fund 88,428.56 10,822.77 77,605.79 717.06%
(b) Investments - others 223.85 199.30 24.55 12.32%
(ii) Trade receivables 12,457.67 12,797.69 (340.02) (2.66%)
(iii) Cash and bank balances 29,314.56 13,307.60 16,006.96 120.28%
(iv) Loans 46,579.91 37,127.81 9,452.10 25.46%
(v) Other financial assets 330.83 145.44 185.39 127.47%
Current tax assets (net) 4,419.40 2,028.33 2,391.07 117.88%
Other current assets 2,05,544.95 1,33,827.61 71,717.34 53.59%
Total 8,90,907.78 6,76,517.35 2,14,390.43 31.69%

2.3 Non-current liabilities

(Rs. in Lakh)
Particulars As at March 31, 2022 As at March 31, 2021 INCREASE/ (DECREASE) % INCREASE/ (DECREASE)
Financial liabilities
(i) Borrowings 2,16,495.95 35,897.76 1,80,598.19 503.09%
(ii) Trade payables 3,219.28 2,151.53 1,067.75 49.63%
(iii) Others 16,705.18 14,386.09 2,319.09 16.12%
Provisions 173.34 156.26 17.08 10.93%
Deferred tax liabilities (net) 2,474.19 3,483.58 (1,009.39) (28.98%)
Other non-current liabilities 3,975.75 3,968.34 7.41 0.19%
Total 2,43,043.69 60,043.56 1,83,000.13 304.78%

2.4 Current liabilities

(Rs. in Lakh)
Particulars As at March 31, 2022 As at March 31, 2021 INCREASE/ (DECREASE) % INCREASE/ (DECREASE)
Financial liabilities
(i) Borrowings 69,050.58 1,17,482.32 (48,431.74) (41.22%)
(ii) Trade payables 39,250.91 30,026.85 9,224.06 30.72%
(iii) Others 21,922.64 20,917.80 1,004.84 4.80%
Other current liabilities >
(i) Advance from customers 6,816.66 3,705.29 3,111.37 83.97%
(ii) Others 1,41,362.03 35,032.40 1,06,329.63 303.52%
Provisions 5,870.61 106.89 5,763.72 5,392.20%
Current tax liabilities (net) 126.32 1,132.80 (1,006.48) (88.85%)
Total 2,84,399.75 2,08,404.35 75,995.40 36.47%

3. Profit and loss analysis

A comparative table showing synopsis of FY 2021-22 versus FY 2020-21 of statement of Profit and Loss is provided below:

(Rs. in Lakh)
Loss 2022 2021
Revenue from operations 2,69,397.04 2,05,257.95 64,139.09 31.25%
Other income 5,845.09 3,800.70 2,044.39 53.79%
Total revenue 2,75,242.13 2,09,058.65 66,183.48 31.66%
Expenses 1,51,263.42 1,05,218.13 46,045.29 43.76%
Depreciation and amortisation expense 3,978.29 4,119.22 (140.93) (3.42%)
Interest and finance charges 8,602.94 7,603.77 999.17 13.14%
Profit before share of profit/ (loss) of joint ventures (net) and exceptional items 1,11,397.48 92,117.53 19,279.95 20.93%
Share of Profit/(Loss) of joint venture (net) 23,960.23 324.95 23,635.28 7,273.51%
Profit before tax 1,35,357.71 92,442.48 42,915.23 46.42%
Profit after tax 1,04,709.83 73,929.18 30,780.65 41.64%
Basic and diluted EPS (in Rs.) 28.80 20.33 8.47 41.66%

3.1 Revenue from operations

(Rs. in Lakh)
2022 2021
Revenue from projects 2,24,701.28 1,65,709.57 58,991.81 35.60%
Revenue from hospitality 7,108.95 3,167.17 3,941.78 124.46%
Other operating revenue 1,492.57 747.24 745.33 99.74%
Rental and other related revenues 32,532.00 32,287.85 244.15 0.76%
Property management revenues 3,562.14 3,346.12 216.02 6.46%
Total 2,69,397.04 2,05,257.95 64,139.09 31.25%

3.2 Expenses

(Rs. in Lakh)
2022 2021
Operating costs 1,34,964.03 89,082.40 45,881.63 51.50%
Employee benefits expense 6,836.93 4,912.18 1,924.75 39.18%
Other expenses 9,462.46 11,223.55 (1,761.09) (15.69%)
Total 1,51,263.42 1,05,218.13 46,045.29 43.76%

4. Cash flow analysis

A comparative table showing synopsis of FY 2021-22 versus FY 2020-21 of Cash Flow is provided below:

(Rs. in Lakh)
Consolidated Cash Flow FOR THE YEAR ENDED ON MARCH 31,
2022 2021
Opening cash and cash equivalents 18,712.84 19,845.47
Net cash inflow from operating activities 1,06,872.72 69,600.90
Net cash outflow from investing activities (1,38,995.58) (59,095.43)
Net cash inflow/(outflow) from financing activities 1,14,221.16 (11,638.10)
Closing cash and cash equivalents 1,00,811.14 18,712.84
Closing cash and cash equivalents including fixed deposits with banks, having remaining maturity of less than 12 months 29,314.56 13,307.60
Closing cash and cash equivalents including fixed deposits with banks, having remaining maturity of more than 12 months classified under non-current financial assets 1,814.15 3,306.36


Performance Management System:

Your Company has adopted a holistic approach to the performance management process that focuses on three broad categories - Nurture & Engage, Connect & Coach, Capability Building & Development.

The process begins with the Annual Goal Setting exercise that provides clarity to all employees about their targets. Goal setting ensures a commitment from all employees to achieve higher business milestones and alignment to the organizations goals at a macro level. The process is followed by a formal Mid Year Review and the Annual Review and Rating exercise.

The essence of the performance management process is Continuous Performance Management (CPM). CPM is an agile, modern, human centered approach of evaluating and improving employee performance. It fosters a forward looking mindset and has an emphasis on real time, frequent check-ins and documentation. It is an approach that breaks the stereotype of formal later date discussions, rather it lays emphasis on spot feedback. The continuous check-ins help create an environment of trust, strengthen relationships, build communication and provide remedial coaching to the employees thereby assisting them to realize their full potential.

The Succession Planning helps in identifying the Critical Roles and High Potential employees who can take up these roles in the future. The process ensures business continuity, creates a pipeline for future leaders and provides employees with a defined growth path and an opportunity for a structured and focused learning.

Your Company has a robust Career Development framework that gives employees the power to define aspirations and take charge of their career. They can discuss their development needs and aspirations with their managers and carve a development plan for the future. Your Company extends the required assistance to employees and provide them with opportunities that can facilitate employees to grow both personally and professionally. This enables employees to achieve their career goals and in turn creates a set of motivated, valuable and skilled workforce.

Learning & Development:

The Learning & Development function aims to foster a culture of continuous collaboration and learning. The blended approach to Learning helps in development of Technical, Behavioral, Leadership as well as General Management skills.

The Learning Management module (LMS) of SuccessFactors positions employees at the center of the learning experience and drives engagement at the organization level. Our e-learning library has courses covering various topics and range from 30 minutes to 1 hour.

The Mobile Learning feature makes learning flexible and accessible anytime, anywhere.

Mental Wellness:

Mental wellness is a positive state of mental health. It ensures that individuals think, feel and act in ways that positively impact their personal and professional life. Your Company has a 24/7 Employee Assistance Program (EAP) available to all employees and their family members.

The program offers professional counselling services to individuals seeking help in managing concerns related to their life. It supports employees who experiences problems that affect their well being and performance at work. These sessions are conducted privately and ensures complete confidentiality.

For the benefit of all employees, your Company organized the mental wellbeing session facilitated by professional counsellors covering certain real-life issues and topics like managing disagreements, dealing with lockdown situations, parenting, time management, work life balance, stress management and others.

This program has greatly assisted employees during the Pandemic and has enabled them to manage stress and face various challenges.

Health and Safety:

Your Company is always committed to the health and safety of its employees. Your Company provides a clean, hygienic and conducive work environment to all employees and doubled these efforts during the pandemic. Vaccination drives were conducted for all employees and their family members.

While your Company has eased the covid restriction at work, your Company is still very cautious and follows social distancing norms, encourage virtual meetings and have place sanitizers at various locations. All employees and their family members are covered under the Companys group medical insurance policy to support hospitalization needs. Special medical leave and flexibility in working hours are provided on case-to-case basis.

HR Automation and Digitalization:

Your Company continues its journey to achieve the vision of paperless organization by leveraging technology and going the digital way. All the HR processes are automated by deploying SAP SuccessFactors, industrys most powerful and flexible Cloud- based HR solution.

Reward and Recognitions:

Incentives - To achieve higher quality, safety, efficient turnaround, customer satisfaction and commitment, your Company has designed and extended Rewarding Incentive Schemes. The Incentive schemes are designed to drive excellence, encourage greater productivity, high- performance culture, collaboration and teamwork. The Incentive schemes reward employees for their individual efforts as well as for achieving targets as a group. Incentives are extended in addition to annual performance assessments and salary increments.

Employee Recognition Program (ERP) - Employee Recognition Program acts as an engagement tool that encourages and recognizes "Excellence" at work on a quarterly basis. It is a platform to showcase and acknowledge outstanding achievements. The program enables employees to understand how their work can make a difference to their peers, business, customers and stakeholders.

This program reinforces values like innovation, effective problem solving, achieving process and operational efficiency and going above and beyond the call of duty to achieve organizational objectives.


It is your Companys constant endeavor to improve its processes and policies. Your Company strives to improve its policies and processes on a continuous basis and benchmarking as a tool assists in achieving the same. It helps to identify actionable insights and stay up to date with Human Capital trends.

Employee Benefits:

Paternity Leave - In support of family life and to provide time off to welcome the new family member your Company has introduced Paternity Leave. This leave enables fathers to spend time with their new-born/ adopted child and care for them. Your Company also recognizes the fact that the support provided to the mother in the initial days helps in reducing the burnout and leads to stronger family bonds.

Employee Discount on purchase of Oberoi Realty Residence property - Buying a dream home is more than an achievement for everyone. A home is a biggest investment someone makes in their lifetime. With the objective of enabling employees to make this investment, your Company has extended a discount on the purchase of an Oberoi Realty Residential property.

Fun at work:

Employees spend more working hours at the workplace than at home which is why having fun and enjoying work is crucial and having fun at work is a key element of employee happiness. Organizing festivals, celebrations, cultural activities break the monotony at work and creates a culture of collaboration.


Industry Awards allow organizations to differentiate themselves from others through a showcase of their best practices. Your Company was recently awarded for Best HR Practices by the World HRD Congress. Recognition at an external platform is a great motivator, affirms your belief and boosts employer branding.

RISKS AND CONCERNS Market price fluctuation

The performance of your Company may be affected by the sales and rental realizations of its projects. These prices are driven by prevailing market conditions, the nature and location of the projects and other factors such as brand and reputation and the design of the projects. Your Company follows a prudent business model and tries to ensure steady cash flow even during adverse pricing scenario.

Sales volume

The volume of bookings depends on the ability to design projects that will meet customer preferences, getting various approvals in time, general market factors, project launch and customer trust in entering into sale agreements well in advance of receiving possession of the projects. Your Company sells its projects in phases from the time it launches the project, based on the type and scale of the project and depending on market conditions.

Pandemic risk

The outbreak of a novel strain of coronavirus (i.e. COVID-19), which commenced in December 2019 has now spread across the world and India being no exception. At the same time, the country is progressing well in its vaccination program. All prominent rating companies and experts, including Reserve Bank of India have projected a healthy recovery of economic activities in India. However, the COVID-19 outbreak could become more severe and result in a more widespread health crisis and/or result in a global recession because of disruptions of economic activity. Any of these factors may have a material adverse effect on your Companys financial condition and results of operations.


Execution depends on several factors which include labour availability, raw material prices, receipt of approvals and regulatory clearances, access to utilities such as electricity and water, weather conditions and the absence of contingencies such as litigation. Your Company manages the adversities with cautious approach, meticulous planning and by engaging established and reputed contractors. As your Company imports various materials, at times execution is also dependent upon timely shipment and clearance of the material.

Rental realizations

The rental realizations on the space leased depends upon the project location, design, tenant mix (this is relevant in the case of shopping malls), prevailing economic conditions and competition. Your Company has set up its retail property in prime location and maintains a fresh ambience resulting in crowd pull and attracting first time kind of retailers. As far as the office space rentals are concerned, the same depends on demand and supply, general economic conditions, business confidence and competition.

Land/Development rights - costs and availability

The cost of land forms a substantial part of the project cost, particularly in Mumbai. It includes amounts paid for freehold rights, leasehold rights, fungible FSI, construction cost of area given to landlords in consideration for development rights, registration and stamp duty. Your Company acquires land/land development rights from the government and private parties. It ensures that the consideration paid for the land is as per the prevailing market conditions, reasonable and market timed. Your Company also enters into MOUs and makes advances for the land/land development rights prior to entering into definitive agreements. The ensuing negotiations may result in either a transaction for the acquisition of the land/land development rights or the Company getting a refund of the moneys advanced.

Financing costs

The acquisition of land and development rights needs substantial capital outflow. Inadequate funding resources and high interest costs may impact regular business and operations. Your Company has always tried to build sufficient reserves resulting out of operating cash flows to take advantage of any land acquisition or development opportunity.


In 2022, we expect the sector to leverage the governments continued focus on infrastructure development and industrial growth. Capital values across both the mid-end and high-end residential segments are expected to witness an uptick in 2022 due to factors such as robust sales momentum and rising input material cost that could force developers to pass on the increase to homebuyers. With the elongated period of remote working and home schooling likely to continue, factors such as larger homes, plotted developments with flexibility on configurations and ancillary amenities are likely to remain key focus areas for developers.

Continued policy push, a revival in economic activity coupled with a low mortgage rate regime are some of the key factors driving residential growth.

Mumbai, Delhi-NCR, Hyderabad and Bangalore are expected to remain on investors radar in 2022.

Focus on Mumbai and beyond

Your Company shall continue to explore development opportunities in and around Mumbai and explore hubs in the nearby regions on a case-by-case basis.

Strengthen relationships with key service providers and develop multiple vendors

In order to continue delivering landmark offerings to our customer, your Company shall further strengthen its relationship with key service providers, i.e. architects, designer and contractors. Your Company is also working on strategy to develop more and more vendors who can deliver product and services in line with Companys philosophy and product offerings.

Internal Control Systems

Your Company has also focused on upgrading the IT infrastructure - both in terms of hardware and software. In addition to the existing ERP platform, the Company is presently reviewing the process documentation to ensure effectiveness of the controls in all the critical functional areas of the Company.


This management discussion and analysis contain forward looking statements that reflects your Companys current views with respect to future events and financial performance. The actual results may differ materially from those anticipated in the forwardlooking statements as a result of many factors.