Oberoi Realty Stock Dips on Q1 Earnings Miss; Nomura Reaffirms 'Buy' and Rs 2,090 Target Amid Mixed Project Performance

Oberoi Realty Stock Dips on Q1 Earnings Miss; Nomura Reaffirms 'Buy' and Rs 2,090 Target Amid Mixed Project Performance​

Oberoi Realty shares declined by 0.91% to ₹1,877.60 on Monday after the company reported its Q1 FY27 results, which came below market consensus estimates. Despite the revenue miss, Nomura retained a 'Buy' rating and maintained a strong target price of ₹2,090 based on its SOTP valuation methodology.

Q1 Earnings Performance versus Consensus Estimates​

The realty player reported that revenue, EBITDA, and PAT rose 32%, 41%, and 29% year-on-year (YoY), respectively, though these figures were measured against a low base. Nomura noted the earnings miss was attributed to slower quarter-on-quarter revenue recognition from key projects like Sky City, Eternia, and Elysian, and lack of revenue recognition from 360 West.

Collections for the quarter stood at ₹920 crore, marking an 8% decline year-on-year. Annuity revenue saw a notable jump, reaching ₹330 crore in Q1 FY27, which is up 18% YoY and driven by the ramp of Commerz III Office assets and the Sky City Mall.

Project Sales Momentum and Unit Launches​

In terms of pre-sales, the company recorded sales at ₹1,050 crore in Q1 FY27, falling short of Nomura's estimate of ₹1,100 crore. The brokerage suggested that the year-on-year decline in pre-sales was largely due to a high base from the prior year, which included the launch of a new tower for the Elysian project in 1Q FY26.

At the prime location of 360 West, Worli, one unit sale was recorded during the quarter at a strong price point of ₹154,000 per square foot on carpet area. This figure is significantly higher compared to previous two quarters when the average was around ₹120,000 per square foot.

Upside Potential in Key Projects and Hospitality​

Nomura highlighted "Pick-up in sales momentum" at Oberoi Garden City, Thane, noting that 49 units were sold this quarter compared to the 16–25 units reported in each quarter during Q1 FY26 to Q3 FY26. Sustenance sales for both Elysian and Sky City projects remained steady as per the brokerage firm.

In hospitality operations, revenue and EBITDA saw healthy growth, increasing by 10% and 12%, respectively, year-on-year. This positive performance in the hotel segment was partly attributed to an ADR increase of 3% YoY alongside occupancy improvements.

Nomura’s Valuation Basis and Target Reaffirmation​

Nomura reaffirmed its 'Buy' rating on Oberoi Realty, setting a SOTP-based target price (TP) at ₹2,090. The brokerage detailed that its valuation incorporates two main pillars: the Discounted Cash Flow (DCF) valuation of the residential portfolio and the Net Asset Value (NAV) of annuity and hotel assets.

The firm’s residential valuation implies a 75% premium over Oberoi Realty's current residential NAV. Conversely, Nomura observed that the stock currently trades at a 49% premium to its own calculated residential NAV.