Oberoi Realty

Oberoi Realty, on Friday was amongst the top gainers on the BSE and this was after the Supreme Court dismissed a lower court judgement and freed up 100 of acres in earlier notified private forest land. This means that the company, which was sitting on this prime property for a long time now will be able to start developing this project. The project, named Exotica has been stuck for many years now and this judgement comprises of 3.3 million square feet and could bring in sales for the company to the tune of Rs.4000 crore. This is expected to finally bring in some activity and development in the company, which for some time now has been sitting mute, waiting for this clearance to come in.

On the financial front, for Q3FY14, the numbers were not encouraging with consolidated net profit literally getting sliced into half, from Rs.134 crore to Rs. 68 crore (YoY). This was on the back of lower topline; total income dropped 40% at Rs.170 crore. EBITDA was down 47% at Rs.90 crore and margin plunged by a jaw dropping 690 bps to 52.7% (YoY). The numbers for Q3 are dismal but the tide seems to have turned with this SC judgement. Morgan Stanley stated that it expects this project to contribute nearly Rs 1,200 crore to Oberoi’s NAV. The stock price is expected to remain buoyant despite the poor Q3 numbers.