Real Estate Setback: Q3 FY24 Results Impact Oberoi Realty Shares
Company Performance Analysis
Oberoi Realty, a prominent Mumbai-based real estate developer, witnessed a significant downturn in its financial performance during the third quarter of the fiscal year 2023-24. The company reported a substantial 49% year-on-year decline in net profit, recording Rs 360 crore for the quarter ended December 31, 2023. This stark contrast from the Rs 702.57 crore net profit reported a year ago can be attributed to weakened topline and operating figures.
Market Reaction
The repercussions of Oberoi Realty’s financial downturn were immediately reflected in the stock market. In the early trade on January 23, the company’s shares experienced an 8.8% decline. As of 10.40 am, the shares were trading at Rs 1,399.5 on the NSE, marking a 6.96% decrease compared to the closing price of the previous session.
Financial Figures Overview
- Net Profit Plunge: 49% YoY decline, from Rs 702.57 crore to Rs 360 crore.
- Revenue from Operations: Dropped by 35.3% YoY to Rs 1,054 crore during Q3 FY24.
Analyst Insights and Recommendations
Morgan Stanley’s Underweight Call
- Target Price: Rs 1,180 per share.
- Concerns Raised: Pre-sales, revenue, and margins fell below expectations for the quarter.
- Pre-sales Performance: Grew 25% YoY but declined 18% sequentially to Rs 7.9 billion in Q3 FY24, falling significantly below estimates.
Market Outlook and Share Movement
Despite a challenging quarter, Oberoi Realty had observed a positive trajectory in its share prices over the past six months, marking a 31% increase. However, this contrasts with the Nifty 50 benchmark index, which gained approximately 9.5% during the same period.
The disparity between actual performance and market expectations suggests a potential underperformance compared to industry peers. Investors are closely monitoring the company’s strategic moves and future financial results amidst the evolving dynamics of the real estate sector.
