'Buy' maintain on Oberoi Realty – TP Rs.268 - Geojit BNP Paribas Financial Services

- Buy rating is maintained on Oberoi Realty with a target price of Rs.268 over one year.

- The company has reported revenue of Rs. 220 crore for 3QFY12, which is down 48% yoy, 15% lower qoq and lower than market estimates.

- Revenue recognition threshold for Esquire has not been triggered yet due to increase in construction cost. EBITDA margins at 66.1% and it is in line with market expectations. EBITDA margins improved 8% qoq and 2% yoy.

- Volume is muted. Last 15 months execution 1.4 million sq ft only. Sales for the 15 months at 0.12 million sq ft, which is down 18% yoy and 33% lower qoq.

- Company has used almost 80% of the IPO proceeds in the last 15 months. Total amount spent is Rs.820 crore, out of which Rs.410 crore has been spent on construction, indicating that at least 1.4 million sq ft have been constructed in the last 15 months.

- Revenue from hospitality came in at Rs.24.8 crore, up13% yoy and 29% up qoq. However, it is lower than market expectation because of lower than expected average revenue per room.

- There was no incremental office leasing in the 3Q.

- New launches (Worli and Mulund projects) are likely to be delayed by 6 months and these launches are expected in 4QFY12 or 1QFY13.

Source : Equity Bulls

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