HDFC securities has recently made a buy call on ORL (Oberoi Reality). The bank has decided the target price to be INR 525; the present market price of ORL is INR 463.70. The time period that has been given by the brokerage is one year and is estimated that the ORL price would attain the price target by end of the FY-19.
The brokerage has made some rational investments that as follows:
- Following an impressive 1HFY19, ORL faced dissatisfying pre-sales in Goregaon as well as Worli.
- In spite of Sky City proceeding with its strong less than fifty units per quarter performance, the pre-sales have leapt down to 0.14 square feet in Q3 FY19.
- Revenue/EBIDTA/PAT that came under 21/38/11 per cent below estimation. Besides this, real estate sector is badly suffering owing to less demand in the luxury segment, NBFC liquidity tightening and mid-tier developers directly hit by RERA, further, leading to default across 6M.
- Suppression in prices and poor impression in sector profitability owing to the inventory liquidation whilst assets of the organized players are up for sales and bailout.
These changes may bring positive changes in ORL brand over the period of time.