Oberoi Realty’s Market Triumph: Record Highs and Expansion Plans

Oberoi Realty's Market Triumph: Record Highs and Expansion Plans

VoM News Desk | November 20, 2023 | 02:23 PM IST | Breaking News | Follow on Google News

Oberoi Realty’s Market Triumph: Record Highs and Expansion Plans

Oberoi Realty’s Market Triumph: Record Highs and Expansion Plans

Oberoi Realty’s share price saw a significant jump of nearly 5%, reaching a 52-week high of ₹1,407.15 on the Bombay Stock Exchange (BSE). This surge occurred during Monday’s trading session, following the company’s strategic purchase of approximately 15 acres of land in Gurugram. This acquisition, valued at ₹597 crore, marks Oberoi Realty’s ambitious entry into the Delhi-NCR real estate market and is set to develop a luxury housing project.

Strong Uptrend and Analyst’s Perspective

The stock opened at ₹1,369.25 on the BSE and has been on a bullish streak for four consecutive sessions. Equity Technical and Derivative Analyst, Rajesh Bhosale from Angel One, highlights that Oberoi Realty’s stock is in a strong uptrend, having risen about 22% in November. He suggests that the uptrend may continue, with the stock price likely to rise further in the near term. Bhosale advises traders to adopt a ‘buy on dip’ approach, with ₹1,340 serving as a support level and ₹1,430 as the next resistance point.

Strategic Land Acquisition in Gurugram

The company’s recent land acquisition in Gurugram is a major strategic move. This purchase was officially announced in an exchange filing on November 17, where the company informed about its agreement with Ireo Residences Company Private Limited for acquiring land at Sector 58, Gurugram, Haryana. The compensation for this transaction includes a financial consideration of up to ₹597 crore and additional project area for existing homeowners, subject to certain terms and conditions. This acquisition grants Oberoi Realty the potential to develop up to approximately 2.6 million square feet of Floor Area Ratio (FAR), aligning with the current regulations.

Market Outlook and Valuation Insights

Brokerage firm Motilal Oswal Financial Services views Oberoi Realty’s entry into the NCR region as a positive development that enhances the company’s growth prospects. However, the firm awaits further details on the project’s launch schedule. Currently, Oberoi Realty’s residential business is valued at about ₹36-37 crore, with the existing pipeline, including the Gurugram project, estimated at ₹23 crore. This valuation suggests a significant going concern premium of 50-60%.

Neutral Rating Amidst Growth Prospects

Despite the company’s expansion and the growth visibility it offers, the brokerage maintains a ‘Neutral’ rating on Oberoi Realty with a target price of ₹1,200. This target indicates an 11% downside potential, factoring in the company’s cautious approach towards new project acquisitions and the already accounted near-term growth visibility.

VoM News Desk

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