Oberoi Realty shares rally 6% to record high as Axis Securities initiates coverage with 'buy' rating

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Oberoi Realty shares surged as much as 6.3% on Monday to a record high of Rs 2,250.65 on BSE after brokerage firm Axis Securities initiated coverage on the real estate developer with a 'buy' rating, at a target price of Rs 2,560, implying an upside of about 14% from current levels.

The brokerage said that its recommendation is underpinned by the company’s strong positioning in Mumbai’s luxury real estate market, a growing annuity income stream, strategic geographic expansion, and solid financial fundamentals.


Axis Capital said it also likes the company's robust annuity scale-up, entry into new key markets, and low leverage with strong cash flows. Oberoi has a substantial leasing portfolio in marquee locations, with occupancy levels exceeding 90%, the brokerage said, adding that the EBITDA margins for its current projects are consistently above 90%.

Oberoi is targeting Rs 1,000 crore in annual exit rentals from its commercial portfolio by FY27, leveraging its strong relationships with marquee tenants. The brokerage noted that by fiscal 2027, Oberoi’s bookings are projected to exceed Rs 9,000 crore, driven by launches in Thane, South Mumbai, and Delhi NCR.


The brokerage also noted that the company is well-positioned to raise additional funds if required, with a net debt-to-equity ratio of 0.02. "Oberoi Realty has consistently maintained a net debt-to-equity ratio of 0.4, reflecting its strong financial discipline and resilience during challenging market cycles. Its annuity cash flows are also set to grow, further contributing to its liquidity," Axis Capital said.

Oberoi Realty shares have seen 53.5% returns year-to-date. The company’s strong balance sheet and healthy cash flows also enable it to secure premium land parcels, which are critical for expanding its portfolio, Axis Capital said.Also read | Wockhardt shares rise 10% after Zaynich aids successful liver transplant trial

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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