On Tuesday, CLSA, a brokerage firm, increased its price target on shares of Oberoi Realty Ltd (OBER:IN) to INR 1,500 from the previous INR 1,260. Despite the hike in the target price, the firm maintained an Underperform rating on the stock. The adjustment follows Oberoi Realty's successful sales performance in its recent Thane project and improved activity in its Worli project.
Oberoi Realty reportedly sold approximately 50% of its launched inventory, garnering about INR 13.5 billion, which will be reflected in the third-quarter results. The company's second-quarter presales outperformed expectations, primarily due to increased interest in its Worli project.
In light of these developments, CLSA has revised upwards its presales estimates for the fiscal years 2025 to 2027, prompting an increase in the earnings forecast and subsequently the target price for Oberoi Realty's shares.
The real estate developer has announced plans to raise INR 60 billion through equity and an additional INR 15 billion through non-convertible debentures. However, the specifics of how these funds will be utilized have not been fully disclosed by the company. Oberoi Realty has indicated that the capital infusion will be directed towards growth initiatives.
The firm's analysts are looking for significant land acquisitions by Oberoi Realty, noting that the absence of such acquisitions in recent years has led to underperformance in sales and created uncertainty regarding the company's ability to sustain growth. The Underperform rating has been retained by CLSA due to what it describes as the company's "rich valuation."
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