For Oberoi Realty, timely launches and leaner inventory key catalysts in FY26

Oberoi Realty Ltd’s March quarter (Q4FY25) was dull. Pre-sales or bookings at ₹853 crore fell over 50% sequentially as well as year-on-year, according to provisional data.

The reading is below some analysts’ estimates. For instance, Antique Stock Broking was pencilling in Q4 pre-sales of ₹1,000 crore.

The lack of new project launches played spoilsport for the Mumbai-focused real estate developer. Thus, it could sell 78 units in Q4 versus 554 units in Q3FY25 and 227 in Q4FY24. Recall that the launch of The Jardin project at Pokhran Road in Thane and the launch of a new tower in the Elysian project at Goregaon had buoyed Q3FY25 and Q4FY24 pre-sales, respectively.

To be sure, FY25 ended on a decent note for Oberoi with pre-sales growth of about 32% year-on-year to ₹5,266 crore. This came from selling 1.3 million square feet across 928 units. In FY24, it had sold 705 units. Oberoi added many new projects during the year, including redevelopment projects across various micro-markets in the Mumbai Metropolitan Region. This gave FY25 pre-sales a boost.

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Oberoi steps into FY26 with the much-anticipated foray in the Gurugram market which is crucial for maintaining pre-sales momentum and diversifying its geographical mix. Projects at Adarsh Nagar, Worli, and Tardeo in Mumbai are expected to be launched in FY26. Apart from timely new project launches, inventory liquidation at existing projects is another crucial factor to determine outlook on pre-sales and realisations.

“Average realisations surged 58% year-on-year/114% sequentially to ₹62,117/sq ft in Q4FY25, indicating larger contribution from the Worli project, whereas the average ticket size was up 41% year-on-year/216% sequentially to ₹10.9 crore,” said a Nuvama Research report dated 21 April.

Oberoi managed to book only two units in the high-ticket marquee project Three Sixty West, located at Worli in Mumbai, in Q3FY25, much lower than the run rate of six units in the previous two quarters.

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Meanwhile, a comforting factor is that Oberoi’s balance sheet is in good stead aided by fundraise and robust cash collections. These have helped ease the debt burden and provide Oberoi’s ability to pursue new business development opportunities.

Oberoi’s shares have gained 19% in the past year, versus negative returns of the sectoral Nifty Realty index. But Nuvama cautions that the weakness in housing volumes has led to concerns about future sales growth, compelling the brokerage house to slash net asset value (a valuation metric for realty stocks) premium for the Oberoi stock to 35% from 60% earlier.

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