Oberoi Realty (OBEREA) - Myiris.com

Initiating Coverage 

Rating Matrix 

Rating : Buy 

Target : | 242 

Target Period : 12-15 months 

Potential Upside : 12% 

YoY Growth (%) 

FY10 FY11 FY12E FY13E 

Net Sales 82.7 26.7 14.7 56.3 

EBITDA 91.4 21.9 9.6 58.0 

Net Profit 81.6 12.9 10.0 29.0 

EPS 81.6 12.9 10.0 29.0 

Current & target multiple 

(x) FY10 FY11 FY12E FY13E 

P/E 15.5 13.8 12.5 9.7 

Target P/E 17.3 15.3 13.9 10.8 

EV / EBITDA 14.4 10.0 9.0 5.3 

P/BV 3.8 2.1 1.8 1.5 

RoNW 24.6 15.4 14.5 15.8 

RoCE 24.9 16.5 15.5 20.8 

Stock Data 

Bloomberg/Reuters Code 

OBER IN / OEBO.NS 

Sensex 15,858.5 

Average volumes 73,006 

Market Cap (| crore) 7,191.6 

52 week H/L 289/211 

Equity Capital (| crore) 328.2 

Promoter's Stake (%) 78.5 

FII Holding (%) 9.6 

DII Holding (%) 1.4 

Comparative return matrix (%) 

Return % 1M 3M 6M 12M 

Oberoi Realty (4.1) (0.4) (2.4) (19.2) 

DLF (13.0) 7.4 (12.3) (38.0) 

Unitech (12.7) (11.9) (27.0) (65.1) 

HDIL (29.6) (40.7) (57.1) (70.5) 

Price movement 

6,400 

5,550 

4,700 

3,850 

3,000 

Dec-10 

Jan-11 

Analyst’s name 

Feb-11 

Mar-11 

Apr-11 

May-11 

Price (R.H.S) 

Jun-11 

Deepak Purswani, CFA 

deepak.purswani@icicisecurities.com 

Jul-11 

Bhupendra Tiwary 

bhupendra.tiwary@icicisecurities.com 

Aug-11 

Sep-11 

Oct-11 

Nifty (L.H.S) 

Nov-11 

310 

260 

210 

160 

110 

Quality in real(i)ty… 

November 24, 2011 

Oberoi Realty (ORL) is an established brand in the Mumbai real estate 

market. Out of its total land bank of 20.6 million sq ft, Oberoi Garden City 

in Goregaon accounts for 50% of the land bank where it not only has land 

cost advantage but also enjoys premium realisation due to integrated 

development. Furthermore, its prudent land acquisition policy coupled 

with premium realisation across regions and recent IPO have made its 

balance sheet much superior compared to its peers (ORL has net cash of 

|1347 crore as on Q2FY12) ensuring timely execution of the project 

pipeline. Moreover, ORL scores high in qualitative assessment of key 

factors further justifying its premium valuation. We initiate coverage on 

the stock with a BUY rating and target price of | 242. 

Oberoi Garden city, Goregaon – a cash cow for ORL 

Oberoi Garden city in Goregaon accounts for 50% of the total land bank 

and 64% to our NAV. ORL not only enjoys cost advantage (ORL land cost 

works out to | 96 psf vs. | 2245 psf at current land parcel prices), it also 

enjoys premium in the realisation due to very well diversified 

development in the region and for its quality of construction. 

Prudent land acquisition & balance sheet strength – a key differentiator 

ORL’s prudent land acquisition strategy (its land parcels are at 

significantly cheaper prices compared to current market prices) coupled 

with premium realisation have made it one of the very few companies in 

the sector that enjoys positive operating cash flow post interest paid (~| 

200 crore in FY11). This, coupled with recent IPO funds, means ORL has 

cash surplus of | 1347 crore in Q2FY12 making it the key differentiator 

compared to its peers. The financial strength would not only ensure 

timely execution but also enable it to acquire the new land bank at better 

prices in case there is a slowdown in the sector. 

ORL scores high in our qualitative assessment 

ORL scores high in terms of our qualitative assessment of key factors 

such as quality of land bank, management track record, quality of 

earnings, disclosures and execution justifying its premium valuation. 

Valuations 

At the current price, ORL is trading at 9.7x FY13 EPS of | 22.4 and 1.5x 

FY13 P/BV. We are initiating coverage on ORL with a BUY 

recommendation and a price target of | 242 (at implied ~13% discount to 

its NAV we have valued Mulund and commercial developments at a 25% 

discount to NAV and have not considered commercial and retail 

development at Worli, Sangam city and the I-Ven property). 

Exhibit 1: Valuation Metrics 

| crore FY09 FY10 FY11 FY12E FY13E 

Net Sales 425.4 777.2 984.3 1,129.5 1,765.0 

EBITDA 247.4 473.4 577.0 632.7 999.9 

EBITDA Margin (%) 58.2 60.9 58.6 56.0 56.7 

PAT 252.3 458.2 517.2 569.1 734.2 

EPS (|) 7.7 14.0 15.8 17.3 22.4 

Price / Book (x) 4.9 3.8 2.1 1.8 1.5 

EV/EBITDA (x) 28.4 14.4 10.0 9.0 5.3 

RoCE (%) 16.5 24.9 16.5 15.5 20.8 

RoNW (%) 17.5 24.6 15.4 14.5 15.8 

Source: Company, ICICIdirect.com Research 

Oberoi Realty (OBEREA) 

| 217 

ICICI Securities Ltd | Retail Equity Research

Shareholding pattern (as on Q2FY12) 

Shareholders 

% Holding 

Promoters 78.5 

FII 9.6 

DII 1.4 

Others 10.5 

Promoters and institutional holding trend (%) 

100.0 

80.0 

60.0 

40.0 

20.0 

0.0 

78.5 78.5 78.5 78.5 

11.0 10.6 10.5 10.4 

Q3FY11 Q4FY11 Q1FY12 Q2FY12 

Company background 

Incorporated in 1998, Oberoi Realty (ORL) is a Mumbai based real estate 

developer focused on premium development with a presence in 

residential, office space, retail, hospitality and social infrastructure 

projects. With almost ~94% of the land bank of 20.6 million sq ft in 

Mumbai and its suburbs, ORL is an established brand name with a strong 

track record of development in the suburbs of Mumbai. The promoters 

and promoter group had started operations in 1983 and collectively 

developed 33 projects covering over 5 million square feet (sq ft), as on 

the IPO date (October, 2010). 

ORL has differentiated itself with its prudent land acquisition strategy, 

strong execution track record, excellent corporate governance and 

pristine balance sheet. Few of the key projects of ORL are Oberoi Garden 

City (Goregaon), Oberoi Splendor (Andheri East), Oberoi Exotica (Mulund) 

and Oberoi Oasis (Worli). Each of the projects have been discussed in 

length in the Appendix section. 

Exhibit 2: Corporate structure 

Oberoi Realty 

100% 100% 100% 31.67% 100% 100% 100% 

Oberoi 

Construction Pvt. 

Ltd. 

Oberoi Mall Pvt. 

Ltd. 

Kingston Property 

Services Pvt. Ltd 

Sangam City 

Township Pvt Ltd 

Kingston 

Hospitality & 

Developers Pvt. 

Ltd. 

Expressions 

Realty Pvt. Ltd. 

Triumph Realty 

Pvt. Ltd. 

50% 100% 

Siddhivinayak 

Realties Pvt. Ltd. 

Perspective 

Realty Pvt. Ltd. 

Oasis Realty 

Zaco Aviation 

SPV jointly owned 

by ORL and other 

partners 

Unincorporated JV 

Subsidiary 


Exhibit 3: Segment wise business model 

Segment Residential Office Space Retail Hospitality Social Infrastructure 

Business Model Sale Sale/Lease Sale/Lease Owned Lease 


ICICI Securities Ltd | Retail Equity Research 

Page 2

Investment Rationale 

ORL scores high on qualitative assessment of key factors 

We have done the qualitative assessment for ORL on given key 

parameters. We have rated ORL on each of these parameters on a scale 

of 1 to 5 with 5 being the highest. We discuss each one of them in detail 

below:- 

• Quality of land bank: ORL has a presence in the Mumbai region, a 

key real estate market. Moreover, ORL is primarily into integrated 

development, which commands higher realisation 

• Management track record: ORL’s promoters have been in the real 

estate business for the last three decades and have delivered over 5 

million sq ft of projects 

• Execution: Almost the entire land bank of ORL is in Mumbai 

enabling it to handle projects closely. Secondly, it has strong 

financial strength along with quality contractor such as L&T that 

provides us comfort in terms of the execution 

• Quality of earnings: ORL follows a conservative revenue recognition 

policy. It does not consider land cost in the total project cost while 

recognising the revenues through the percentage completion 

method. Furthermore, ORL has a debt-free balance sheet, which 

gives us comfort in terms of quality of earnings 

• Disclosures: ORL provides exhaustive disclosures in terms of the 

land bank, project details and units sold during the time period. 

Furthermore, ORL has a very simple corporate structure with very 

few subsidiaries, which makes it easy to keep track. 

Exhibit 4: Qualitative assessment of ORL 

Disclosure 

ORL scores high in terms of our qualitative assessment of 

key factors such as quality of land bank, management 

track record, quality of earnings, disclosures and 

execution, thereby justifying its premium valuation 

Quality of Earning 

Execution 

Management Track 

Record 

Quality Land Bank 

1 2 3 4 5 


* Rating of 5 is highest and 1 is lowest 


Page 3

Oberoi Garden City, Goregaon - a cash cow for ORL 

Oberoi Garden City project, an integrated mix development on 84 acres of 

land in Goregaon, is a cash cow for ORL where it commands higher 

margins compared to its peers. ORL had bought ~84 acres of land during 

1999-2005 at a meagre ~| 107 crore implying | 1.3 crore/acre while the 

last reported land deal (in July, 2010) in Goregaon was done at | 25 

crore/acre. Additionally, currently the land parcels in the area are quoting 

at | 30-35 crore per acre. 

On the other hand, ORL enjoys a premium in the realisation compared to 

the market price due to very well integrated developed projects. ORL’s 

diversified offering, which includes commercial, retail, hospitality and 

social infrastructure developments along with residential offerings make it 

an attractive proposition for the customers. This helps ORL to command 

higher realisation vis-à-vis its peers. Furthermore, ORL also commands a 

premium for the quality and timeliness in execution (ensured with 

projects contracted to L&T). 

With premium realisation and low cost land holding in the area, ORL 

commands superior margins vis-à-vis developers who own land at the 

current land parcel prices. As a result, though this geography accounts for 

50% of the developable area, it contributes 64% to our target price. 

With premium realisation and low cost land holding in the 

area, ORL commands superior margins vis-à-vis other 

developers 

Exhibit 5: Lower Land cost enables ORL to command higher OPM per sq ft 

ORL 

Other developer 

Acres 1 1 

Sq ft 43560 43560 

Saleable Area (sq ft) 133196 133196 

Realisation per sq ft (|) 12500 10000 

Land cost per acre (| crore) 1.3 30 

Land cost per sq ft (|) 96 2252 

Construction & other costs per sq feet (|) 4258 3758 

Total cost per sq ft (|) 4354 6010 

EBITDA per sq ft (|) 8146 3990 

Margin 65.2% 39.9% 


*we have assumed the same FSI (implied at 3.1x) used by ORL at Oberoi Garden City 

Exhibit 6: Goregaon encompasses 10.4 msf (~50%) of developable area 

Exhibit 7: …and contributes | 157 per share (64%) to our target price 

3.2 

16% 

2.6 

13% 

3.1 

15% 

1.3 

6% 

10.4 

50% 

in mn sq ft 

16.2 

3.9 7% 

2% 16.8 

7% 

48.1 

20% 

156.7 

64% 

(|) 

Goregaon Andheri Worli Mulund Pune 

Goregaon Andheri Worli Mulund Pune Cash 




Page 4

Prudent land acquisition strategy – Quality land bank bought at cheaper price 

ORL has been a prudent land buyer. The company has a track record of 

acquiring land bank at city centric locations at reasonable rates. This 

enables it to enjoy high margins post development on those land parcels. 

The Goregaon land purchase has been one of its smart buys where the 

company started the acquisition of land in 1999 and went on acquiring the 

adjacent parcels at attractive prices over the next six years. We notice that 

land prices in this region are at | 30-40 crore per acre currently. In 2010, 

the transaction done by Sunteck Realty implies a land cost of | 25/ acre. If 

we assume the same FSI (3.1x) used by Oberoi on this transaction, land 

cost per sq ft works out to ~| 1877 per sq ft vis-à-vis the Oberoi land cost 

per sq ft of | 96 per sq ft. Similarly, the company’s land acquisition cost in 

the Andheri and Mulund area is significantly lower than recent acquisition 

cost. Such a prudent land acquisition strategy would enable better 

profitability and return ratios (currently reflected in its financials). 

Prudent land acquisition strategy enables better 

profitability and return ratio for ORL 

While this strategy has been fruitful so far, going ahead, it will be difficult 

for ORL to repeat the past track record in land purchase considering the 

rising land prices in Mumbai and its suburbs. Nevertheless, availability of 

financial resources (cash balance and investment of ~| 1347 crore in 

Q2FY12) and a strategy of being prudent in land purchase ensures that 

land acquisition will not be a major problem for ORL. Moreover, with cash 

at its disposal, ORL would be best suited to lap up a land deal in the 

scenario where most of it peers are debt ridden. 

Exhibit 8: Land parcel details 

Cost per acre Developeable Area ( 

(| crore) in mn sq ft) 

Land cost per 

sq ft (| ) 

Land Parcel Year Area (acres) Cost (| crore) 

Goregaon 1999-2005 83.9 106.8 1.3 11.2 96 

Andheri West 2005 7.0 31.7 4.6 0.6 508 

Andheri East 2005 24.5 106.0 4.3 3.1 339 

Mulund 2005 18.8 221.0 11.7 3.2 690 


Exhibit 9: Recent land acquisition deals 

Cost per acre 

(| crore) 

Land cost per 

sq ft* (|) 

Land Parcel Year Area (acres) Cost (| crore) 

Buyer 

Mulund (W) Jul-10 4.5 200 44.4 2611 Kalpaturu 

Mulund (W)# Jan-10 18 200 11.1 653 Runwal group 

Goregaon Jul-10 6 150 25.0 1877 Sunteck Realty 

JVLR Oct-10 15 200 13.3 1489 DB Realty 

Source: Media Articles, ICICIdirect.com Research 

*In order to see like to like land cost per sq ft, we have assumed same FSI, which is implied by Oberoi 

projects in that areas 

#This deal seems to be distressed (plot sold by Wockhardt). Otherwise, Raheja Universal quoted 

| 700 crore in 2008 but backed out at a later stage. On those quotes, the land cost per acre works out 

to | 38.9 crore and land cost per sq ft works out to | 2285 psf 


Page 5

I-Ven stake buy reiterates our “smart buyer” stance for ORL on relative basis… 

ORL has announced that it has recently bought a 50% stake in I-Realty 

(the JV between ICCI Venture and promoter group company of ORL) from 

ICICI Venture. While the company did not disclose the financial details 

about the deals, media reports indicate that it has bought a 50% stake for 

~| 300 crore valuing the 4.1 acre project at | 600 crore or | 150 per acre. 

The financials and balance sheet also seem to suggest that the deal could 

have been done at a similar valuation. The implied land price of ~| 150 

crore/acre is much lower than the recent quotes for land available in the 

Worli area (please refer Exhibit 10). 

The deal, if compared with other quoted property deals in this area, 

seems to be much better and reiterates our view in terms of the prudent 

land acquisition policy of ORL. In terms of NAV contribution, this deal 

contributes | 3.9/share after considering the assumption in Exhibit 11 and 

12. We highlight that FSI would play a major role for value accretion in the 

future. Currently, we have considered FSI of 2.7x (including 1x of car 

parking FSI) as guided by the management. 

However, we highlight we have not considered the same in our target 

price estimates as the commencement of work on the project could take 

nine to 12 months after the BMC issue gets settled and lack of clarity on 

parking FSI continues to persist. Therefore, availability of parking FSI on 

this plot would play a major role in terms of value accretion in future. We 

show the sensitivity to our NAV valuation at different FSI levels in Exhibit 

13. 

The implied land price of ~| 150 crore/acre is much lower 

than recent quotes for land available in the Worli area 

Exhibit 10: Recent land parcels offers in Worli 

Property Size (acres) Quoted Sale Price (| crore) Cost/Acre (| crore) 

Poddar Mills Land 2.4 474 197.5 

HUL Land 1.0 300 300.0 

Dunlop Land 1.0 300-350 300.0 

Oberoi stake in Worli project 4.1 600 146.3 

Source: Press reports, ICICIdirect.com Research 

Exhibit 11: Assumptions 

Assumption 

Acres 4.1 

FSI 2.7x 

Saleable Area ( in mn sq ft) 0.5 

Project launch date 

FY14E 

Project completion 

FY18E 


Exhibit 12: Per sq ft assumptions 

Per sq assumption | 

Realisation 45000 

Construction cost 5000 

Other cost 740.7 

SG&A exps 2250 


Exhibit 13: NAV contribution sensitivity to FSI 

Availability of parking FSI on this plot would play a major 

role in terms of value accretion in future 

FSI 2.0 x 2.5 x 2.7 x 3.0 x 3.5 x 

NAV (| cr) 22.1 98.2 129 174.3 250.4 

NAV/share 0.7 3.0 3.9 5.3 7.6 



Page 6

Project launches to keep sales momentum strong 

Residential projects launch of ~3.2 msf over 6-12 months 

ORL has a strong pipeline of ongoing and planned projects, which are 

launched/to be launched over the next six to 12 months in the residential 

segment. This should ensure strong sales momentum for ORL. ORL is 

likely to launch ~3.2 million sq ft over the next six to 12 months. This 

includes Oasis Residential - Worli (1.54 million sq ft), which is likely to be 

launched in Q4FY12 and Oberoi Exotica I - Mulund (1.61 million sq ft) 

expected to be launched in Q1FY13. 

After the launch of all the residential projects in ORL’s 

current portfolio, we expect the yearly residential sales 

volumes to inch up to 2 million sq ft in FY16E from ~0.7 

million sq ft in FY11 

Additionally, the launch of the next phase of residential projects in 

Goregaon (Esquire II), Mulund (Exotica II) and Pune (Sangam city 

residential) would keep sales volumes robust, going forward. 

Consequently, from the residential sales volumes of ~0.7 million sq ft in 

FY11, we expect it to become ~2.9x to 2 million sq ft in FY16E. 

Exhibit 14: Trend in residential sales volume ( in million sq ft) 

(mn sq ft) 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

2.0 2.0 

1.7 0.2 0.2 

1.4 0.2 0.6 

0.8 

0.3 0.5 

0.9 0.1 

0.2 

0.7 

0.3 0.1 0.3 0.2 

0.2 

0.1 

0.3 

0.2 

0.6 0.6 0.7 0.6 

0.8 

0.6 

FY11 FY12E FY13E FY14E FY15E FY16E 

Goregaon Andheri Worli Mulund Pune 


Note: I Venture volume is not considered the above sales volumes. 

We expect ORL’s lease income to more than quadruple to 

~| 524 crore by FY17E from | 113 crore in FY11 

Addition to lease portfolio to provide stable income, going ahead… 

With the completion of Phase I of Commerz II, ORL would add ~0.73 

million sq ft to it current leasable portfolio of ~0.92 million sq ft (~0.8 

million sq ft already leased). Furthermore, the completion of phase II of 

Commerz will add ~1.66 million sq ft to the total leasable portfolio. 

Consequently, we expect ORL’s lease income to more than quadruple to 

~| 524 crore by FY17E from | 113 crore in FY11. Therefore, the addition 

to the lease portfolio will ensure a stable income, going forward, for ORL. 

Exhibit 15: We expect area leased to quadruple by FY17E… 

Exhibit 16: …and lease income to increase to 4.6x by FY17E 

(sq ft) 

3.5 

3.0 

3.0 

2.5 

2.0 

0.5 

2.0 

1.4 1.5 

0.5 1.5 

1.5 

1.2 

0.8 0.9 

0.5 0.5 0.4 

1.0 

0.5 

0.5 0.5 0.4 0.5 0.7 0.7 0.7 

0.5 

0.1 

0.3 0.3 0.3 0.4 0.4 0.4 0.4 

0.0 

FY11 FY12E FY13E FY14E FY15E FY16E FY17E 

Commerz I Commerz II Phase I Commerz II Phase II Oberoi Mall 

(| crore) 

600.0 

524 

500.0 

89 

400.0 

325 

300.0 

227 248 

87 267 

168 

200.0 113 124 

84 86 73 

100.0 

82 

83 101 102 103 

67 79 32 

46 45 54 60 62 63 65 

0.0 

FY11 FY12E FY13E FY14E FY15E FY16E FY17E 

Commerz I Commerz II Phase I Commerz II Phase II Oberoi Mall 




Page 7

ORL is one of the very few companies in the sector, which 

enjoys a positive operating cash flow post interest paid 

and has a strong cash balance and investment 

Rich balance sheet – superior to peers 

Given its prudent land acquisition policy and premium realisation 

enabling it to fetch better profitability and the recent IPO, ORL has strong 

financial strength with a debt-free balance sheet. While almost all major 

players in the industry suffer from a high debt level and interest cost 

pains, ORL is clearly hassle-free in this regard. It is also one of the very 

few companies in the sector, which enjoys a positive operating cash flow 

post interest paid (~| 200 crore in FY11) and has a strong cash balance 

and investment of ~| 1347 crore (as on Q2FY12). 

Financial strength ensures that the company will not have to depend upon 

external financing to fund its construction capex. Thus, unlike its peers, 

ORL does not cough out interest expenses (peers had to shell out as high 

as 43-94% of operating cash flows as interest expenses in FY11). The 

strong financial health also provides us comfort in the timely execution of 

projects. Additionally, the financial health would also enable it to acquire 

the new land bank at a better valuation in case there is a slowdown in the 

sector. 

Exhibit 17: Peer comparison (FY11 financials abstract) 

Debt-Equity Ratio 

Operating Cash Flow 

(| crore) 

Gross Interest paid (| 

crore) 

Interest paid as % of 

Operating CF 

Oberoi Realty (0.3) 200.3 0.0 0.0 

DLF 0.9 2,757.0 2,591.3 94.0 

Unitech 0.5 1,163.4 1,071.3 92.1 

Sobha Developer 0.7 403.5 174.2 43.2 

HDIL 0.4 (2,363.4) 83.6 


Exhibit 18: Net debt to equity - Peer group analysis 

(x) 

4.0 

3.5 

3.0 

2.5 

2.0 

1.5 

1.0 

0.5 

0.0 

(0.5) 

(1.0) 

3.7 

2.5 

2.3 

2.0 

1.8 1.7 

0.5 0.7 

0.8 0.9 

0.6 0.8 

0.9 

0.7 0.7 0.8 

0.7 0.5 

(0.3) 0.1 (0.1)(0.2)(0.4) 

ORL DLF Unitech Sobha Developer HDIL 

0.5 

0.4 

FY07 FY08 FY09 FY10 FY11 


Exhibit 19: Interest paid as percentage of operating cash flows (FY11) 

100.0 

94.0 92.1 

Unlike it peers, ORL did not cough out interest expenses as 

high as 43-94% of operating cash flows as interest 

expenses in FY11 

(%) 

75.0 

50.0 

43.2 

25.0 

- 

0.0 

ORL DLF Unitech Sobha Developer 



Page 8

Mumbai residential realty – Long-term growth outlook intact 

Unaffordability to keep short-term volume offtake under pressure 

Sustained higher prices in Mumbai and suburb region have led to a sharp 

rise in the affordability ratio and, therefore, cooling off of volume offtake 

in the last couple of quarters. With volumes drying up due to property 

prices inching beyond the means at the given income level, a price 

correction is warranted at the current levels. 

While other developers could go for a price cut to support 

their sales momentum, ORL, with a strong balance sheet 

will be better placed than its peers who have been 

struggling with their leveraged balance sheet 

We believe a price correction of ~10% from current levels coupled with a 

respite in interest rate by ~50-100 bps will bring the affordability back to 

the 2009 level where a pick-up in demand was seen. While interest rate is 

governed by macroeconomic factors, the continued sluggishness in 

volume offtake is likely to force developers to go for a price cut to support 

their sales momentum. We highlight that ORL, with a strong balance 

sheet, will be better placed than its peers who have been struggling with 

their leveraged balance sheet. 

Exhibit 20: Slow volume offtake reflected in falling property registration 

Exhibit 21: Rising unaffordability warrants price correction… 

10000 

8000 

6000 

4000 

Average 

(x) 

5.2 

5.0 

4.8 

4.6 

4.4 

4.2 

4.3 

4.6 

5.0 

5.1 

5.0 

4.5 

4.7 

4.8 

60.0% 

55.0% 

50.0% 

45.0% 

2000 

Dec-08 

Mar-09 

Jun-09 

Sep-09 

Dec-09 

Mar-10 

Jun-10 

Sep-10 

Dec-10 

Mar-11 

June-11 

4.0 

2004 2005 2006 2007 2008 2009 2010 2011 

Property to income (x) Affordability ratio (%) 

40.0% 

Source: ICICI Property Services Group, ICICIdirect.com Research 

Source: HDFC Q2FY12 presentation, ICICIdirect.com Research 

Long-term residential demand to outpace supply 

The growth in the real GDP, changing income demographics, shortage of 

housing units and increased corporate spending being the financial hub 

of the country supports the long-term outlook for the Mumbai real estate. 

Cushman & Wakefield in its report “Embracing Change – Scripting the 

future of Indian Real Estate” has estimated a shortfall of 1.3 million 

residential units during CY11-15 in India. As per the report, Mumbai is 

likely to record demand growth at 14% CAGR during CY11-15 and is 

expected to experience a shortfall of 0.4 million residential units during 

the same period. As a consequence of this demand supply gap, the longterm 

property pricing in the Mumbai region is expected to be robust. 

Exhibit 22: Residential demand-supply projection CY11-15 

As a consequence of this demand supply gap, the long 

term property pricing in Mumbai region is expected to be 

robust 

Region Supply (units) Demand (units) Gap (units) 

NCR 287,000 717,000 -430,000 

Mumbai 240,000 651,000 -411,000 

Bangalore 111,000 287,000 -176,000 

Hyderabad 104,000 197,000 -93,000 

Chennai 118,000 176,000 -58,000 

Pune 76,500 170,000 -93,500 

Kolkata 87,500 166,000 -78,500 

Total 1,024,000 2,364,000 -1,340,000 

Source: Cushman & Wakefield, Hindu Business line dated October 9, 2011, ICICIdirect.com Research 


Page 9

Financials 

Revenue to grow at 33.9% CAGR during FY11-13E 

The revenues of ORL grew at 52.1% CAGR during FY09-11 on the back of 

strong revenue recognition from the projects launched. We expect ORL’s 

topline to grow at 33.9% CAGR during FY11-13E driven mainly by the 

revenue recognition from the ongoing projects. We highlight that we have 

built in slower execution and, consequently, stronger execution by ORL 

would pose an upside risk to our estimates. 

Exhibit 23: Revenue growth trend 

We expect ORL’s topline to grow at 33.9% CAGR during 

FY11-13E driven mainly by revenue recognition from 

ongoing projects 

(| crore) 

2000 

1800 

1600 

1400 

1200 

1000 

800 

600 

400 

200 

0 

33.9% CAGR 1,765.0 

52.1% CAGR 

1,129.5 

984.3 

777.2 

425.4 

FY09 FY10 FY11 FY12E FY13E 


EBITDA margins to be maintained at 56-57% during FY12E-FY13E 

We expect ORL to maintain its EBITDA margin of 56-57% 

during FY12E-13E as the increased cost of construction 

would be set off by the lower cost of land and premium 

pricing 

We expect ORL to maintain its EBITDA margin of 56-57% during FY12E- 

13E as the increased cost of construction would be set off by the lower 

cost of land and premium pricing commanded by the company. 

Exhibit 24: EBITDA margin trend 

(%) 

62 

61 

60 

59 

58 

57 

56 

55 

54 

53 

58.2 

60.9 

58.6 

56.0 

56.7 




Page 10

Bottomline to grow at 19.2% CAGR during FY11-FY13E 

Strong revenue growth and a robust EBITDA margin led to bottomline 

growth at 43.2% CAGR during FY09-11. We expect ORL’s bottomline to 

grow at 19.2% CAGR during FY11-13E, led by the strong topline growth, 

robust margins and no leverage on its balance sheet. 

We expect ORL’s bottomline to grow at 19.2% CAGR 

Exhibit 25: Bottomline growth trend 

during FY11-FY13E, led by the strong topline growth, 

robust margins and no leverage on its balance sheet 

800 

19.2% CAGR 

734.2 

(| crore) 

700 

600 

500 

400 

300 

252.3 

43.2% CAGR 

458.2 

517.2 

569.1 

200 

100 

0 



Return ratios to remain strong despite strong cash balance… 

Strong revenue growth and robust margins on the back of low cost of 

land have enabled ORL to enjoy strong return ratios historically. We 

expect ORL to maintain its strong return ratios (RoNW of 15-16%) on the 

back of healthy revenue and bottomline growth, robust margins and 

premium pricing that it commands. The marginal decline in RoNW is due 

to the higher tax rate that ORL would have to pay on the new projects. 

We expect ORL to maintain its strong return ratios (RoNW 

Exhibit 26: Return ratios trend 

of 15-16%) on the back of healthy revenue and bottomline 

growth, robust margins and premium pricing that it 

commands 

(%) 

30 

25 

20 

15 

10 

16.5 

17.5 

24.9 

24.6 

16.5 

15.4 

15.5 

20.8 

14.5 15.8 

5 

0 


RoCE 

RoNW 



Page 11

Risk & concerns 

Delays in execution of projects 

Few of the projects of ORL have faced delays due to regulatory approvals 

and further delays in clearances could add to the woes. In terms of 

delays, the Sangam City project and Oberoi Exotica are still awaiting a few 

clearances due to which the development has still not been taken up for 

the projects. 

Oberoi Exotica, Mulund: The land was originally declared as forest land 

and ordered the same in the High Court. ORL subsequently appealed 

against the High Court order and got relief from Supreme Court allowing 

the company to construct and create third party interest. However, 

Supreme Court also gave a qualification saying they need MoEF approval. 

The state government has applied for the MoEF approval and it is still 

awaited. 

Sangam City, Pune: The said land is in a green zone. The permission for 

conversion of the land from agricultural to non-agricultural use is under 

process and the company is awaiting clearance for the same. 

Failure to buy land at reasonable rates 

ORL currently enjoys a debt free balance sheet and cash balances of ~| 

1347 crore (as on Q2FY12) and is poised to be better placed in terms of 

lapping up a land buy. However, the land prices have not seen a respite. 

Therefore, failure to augment its land bank considering the high cost or 

giving in to a pricey deal could be a key risk for the company limiting its 

growth, going forward. 

Interest rate risk & bank regulation 

High inflation has led to a rate hike of 375 basis points in the last year and 

half by RBI. Consequently, home loan rates have gone up ~250 bps in the 

same period. With inflation showing no respite, the rates are expected to 

remain high and could keep the borrowing cost for consumers high, 

which discourages demand. 

Additionally, the RBI has also increased the risk weights for loans more 

than | 75 lakh and restrained lending more than 80% of the value of the 

home. Such a move reflects RBI’s discomfort at the rise in residential 

prices. Continued regulatory tightening would mean pressure on demand 

and, consequently, residential prices. 

Exhibit 27: Series of rate hikes during last year and half 

9.00 

8.00 

7.00 

6.00 

5.00 

4.00 

Feb-10 

Mar-10 

Apr-10 

May-10 

Jun-10 

Jul-10 

Aug-10 

Sep-10 

Oct-10 

Nov-10 

Dec-10 

Jan-11 

Feb-11 

Mar-11 

Apr-11 

May-11 

Jun-11 

Jul-11 

Aug-11 

Sep-11 

Source: RBI, ICICIdirect.com Research 


Page 12

Risk of car parking FSI regulations 

The Maharashtra government has done away with the old FSI scheme 

and has introduced a new scheme wherein 40% of the unearned income 

from additional car parking FSI has to be shared with the government. 

ORL is awaiting clarity on the same. We highlight that we have not 

factored in the profit sharing component and in case ORL is asked to 

share profit, there may be a downward risk to the NAV of new projects. 

Business concentrated in Mumbai region 

ORL has primarily focussed its development on the Mumbai region. 

However, we believe a sustained slowdown in volume offtake could pose 

a concentration risk for ORL due to its inability to expand into areas 

outside Mumbai. 

Continued oversupply in commercial segment 

DTZ is anticipating new supply of 40 million sq ft in the commercial space 

in the Mumbai region over the next three years vs. annual absorption of 

8-9 million sq ft. This oversupply may lead to a prolonged weakness in 

leasing and project execution, thereby limiting ORL’s commercial 

segment growth. 


Page 13

NAV work outs to | 278/share with target price of | 242 

implying a discount of ~13% as we have valued Mulund 

and commercial developments at a 25% discount to NAV 

and have not considered commercial and retail 

development at Worli, Sangam city and the I-Ven property 

Valuation 

We have valued ORL on the NAV methodology as this methodology 

captures the true value from the entire land bank. We have considered 

discounting rate of 15% for valuing the projects. To value the commercial 

and retail property, we have used the cap rate of 11%. Based on these 

assumptions, our NAV work outs to | 278/share and target price of | 242. 

Our target price implies a discount of 13% to our NAV as we have valued 

the Mulund project at a 25% discount to NAV due to regulatory delays. 

Additionally, we have valued commercial developments at a discount of 

25% and have not incorporated commercial and retail development at 

Worli, Sangam city and I-Ven property in our target price. 

Exhibit 28: Valuation table 

Location Type Status 

Saleable Area ( 

in mn sq ft) NAV NAV Multiple Value (| cr) |/share 

Goregaon 10.4 5616.7 5141.1 157 

Oberoi Mall Retail Completed 0.6 711.4 1.0x 711.4 22 

Commerz I Commercial Completed 0.4 487.3 1.0x 487.3 15 

Westin Hotel Completed 0.4 403.5 1.0x 403.5 12 

Exquisite I Residential Ongoing 1.5 680.7 1.0x 680.7 21 

Exquisite II Residential Ongoing 2.0 775.1 1.0x 775.1 24 

Commerz II Phase I Commercial Ongoing 0.7 897.8 0.8x 673.4 21 

Exquisite III Residential Planned 1.7 544.2 1.0x 544.2 17 

Commerz II Phase II Commercial Planned 1.7 1004.8 0.8x 753.6 23 

Oberoi International school Ongoing 0.3 

Education complex Social Infrastructure Planned 0.9 111.9 1.0 x 111.9 

3 

Hospital Planned 0.4 

Andheri 3.1 640.5 551.3 17 

Oberoi Splendor Residential Ongoing 1.3 147.2 1.0x 147.2 4 

Oberoi Splendor Grande Residential Ongoing 0.3 128.0 1.0x 128.0 4 

Oberoi Maxima Commercial Ongoing 0.3 118.0 0.8x 88.5 3 

Oberoi Prisma Commercial Ongoing 0.7 203.9 0.8x 152.9 5 

Oberoi Splendour IT park Commercial Planned 0.1 28.7 0.8x 23.0 1 

Oberoi Splendour school Social Infrastructre Planned 0.4 14.7 0.8x 11.7 0 

Worli 2.6 483.4 128.8 4 

Oasis Residential Residential Ongoing 1.5 161.0 0.8x 128.8 4 

Oasis Commercial Commercial Ongoing 0.2 88.5 0.0x 0.0 0 

Oasis Mall Retail Ongoing 0.1 44.8 0.0x 0.0 0 

Oasis Hospitality Hospital Ongoing 0.2 60.5 0.0x 0.0 0 

I-Ventures Residential 0.5 128.6 0.0x 0.0 0 

Mulund 3.2 709.6 532.2 16 

Oberoi Exotica I Residential Planned 1.6 386.8 0.8x 290.1 9 

Oberoi Exotica II Residential Planned 1.6 322.8 0.8x 242.1 7 

Pune 1.3 101.7 0.0 0 

Sangam city - Residential Residential Planned 0.8 76.7 0.0x 0.0 0 

Sangam city - Commercial Commercial Planned 0.3 12.7 0.0x 0.0 0 

Sangam city - Retail Retail Planned 0.3 12.3 0.0x 0.0 0 

Net cash/ (Debt) 1577 1.0x 1577.4 48 

Total 20.6 9129.3 0.87x 7930.7 242 



Page 14

Exhibit 29: NAV distribution 

(|) 

300 

250 

200 

150 

100 

50 

0 

18 

49 

Unlike its peers, ORL's 85% NAV is 

skewed over the next five years 

47 48 

130 134 149 

54 

173 

62 

85 

236 253 

91 

99 99 100 

274 275 278 

Operational FY12E FY13E FY14E FY15E FY16E FY17E FY18E FY19E FY20E 

Cumulative NAV (|) Cumulative % 

100 

90 

80 

70 

60 

50 

40 

30 

20 

10 

0 

(%) 


Exhibit 30: Target price break-up 

300 

250 

200 

20 

15 

22 

3 

48 

37 

Goregaon contributes | 171 (64%) to our NAV 

150 

278 

100 

50 

171 

242 

0 

Goregaon 

Andheri 

Worli 

Mulund 

Pune 

Cash 

NAV 

Discount 

Target Price 

(|) 


ORL, with superior return ratios, a strong balance sheet and cash at its 

disposal, commands a premium compared to it peers. The sector 

concerns over leveraged balance sheet, corporate government issues and 

sluggish volume offtake have led to a sharp correction in the share price 

of the leading players. ORL meanwhile with its consistent performance, 

high disclosure and financial strength has rightly justified its premium. 

Exhibit 31: Peer valuation metrics 

Mkt Cap 

(| crore) 

EPS Price/Earnings(x) EV / EBITDA (x) 

Price / Book (x) RoE (%) 

FY11 FY12E FY13E FY11 FY12E FY13E FY11 FY12E FY13E FY11 FY12E FY13E FY11 FY12E FY13E 

DLF 33606 9.6 9.7 11.7 18.2 20.3 16.9 13.7 13.1 12.0 1.3 1.3 1.2 6.8 6.3 7.1 

ORL 7192 15.8 17.3 22.4 13.8 12.5 9.7 10.0 9.0 5.3 2.1 1.8 1.5 15.4 14.5 15.8 

Unitech 6288 2.2 2.1 2.7 8.8 11.3 8.9 10.0 12.8 10.2 0.6 0.5 0.5 6.7 4.7 5.8 

Godrej Properties 4501 18.7 20.0 32.1 39.3 32.2 20.1 62.7 28.2 16.6 5.1 4.4 3.7 13.6 14.6 20.5 

HDIL 2761 20.7 20.1 25.3 2.9 3.3 2.6 5.6 5.3 4.2 0.3 0.3 0.2 11.0 8.5 9.7 

Sobha Developer 2182 17.8 19.1 24.3 11.8 11.6 9.2 10.2 9.9 7.9 1.3 1.1 1.0 10.6 9.5 11.0 

Orbit Corporation 305 6.9 3.0 5.8 5.3 11.9 6.2 6.4 8.2 4.8 0.4 0.4 0.4 8.7 3.5 6.4 

Source: Company, ICICIdirect.com Research, Bloomberg Consensus Estimates 


Page 15

Key assumption & sensitivity analysis 

In order to derive ORL’s NAV of | 278/share and target price of | 

242/share, we have built up the key assumption. We discuss them below 

and show the sensitivity to our key assumptions. 

• Exhibit 30 and 31 provides the realisation and construction cost 

psf assumption for each of the projects along with the project 

completion assumption 

• We have considered the realisation and cost escalation of 5% per 

annum from FY13E onwards in each of the projects. Exhibit 32 

shows the sensitivity to these assumptions 

• In terms of commercial and lease portfolio, we have considered 

the cap rate of 11% in order to derive NAV. Exhibit 33 shows the 

sensitivity to this assumption. Every 100 bps decline in the cap 

rate would increase our target price by ~ | 9 per share 

• We have considered the discount rate of 15% in order to value 

ORL’s land bank. Exhibit 34 shows the sensitivity to this 

assumption. Every 100 bps change in discount rate would impact 

our target price by | 4 per share 

Exhibit 32: Development portfolio assumptions 

FY2012E 

Realisation psf Construction cost psf Completion 

Exquisite I 14020 3,500 FY14E 

Esquire 11740 3,500 FY15E 

Esquire II 11740 3,500 FY17E 

Splendour 21875 3,500 FY12E 

Splendour Grande 13374 3,500 FY13E 

Exotica I & II 8500 3000 FY16E-FY17E 

Oberoi Maxima 10000 3500 FY14E 

Oberoi Prisma 10000 3500 FY16E 

Oberoi Splendour IT park 10000 3500 FY16E 

Oasis Residential 35000* 5000 FY19E 

Oasis Commercial 30000* 5000 FY19E 

Oasis Mall 35000* 6000 FY19E 

Oasis Hotel 40000* 10000 FY19E 

I-Ventures 45000 5741 FY18E 

Sangam city - Residential 6000 2000 FY17E 

Sangam city - Commercial 6000 2000 FY18E 

Sangam city - Retail 7500 2500 FY18E 


* Oberoi has revenues share of 25%-40% in realisation in Oasis projects. 

Exhibit 33: Lease portfolio assumption 

FY2012E 

Lease rate pm psf Construction cost psf Completion 

Oberoi Mall 124 Operational 

Commerz I 132 Operational 

Commerz II Phase I 120 3500 FY13E 

Commerz II Phase II 120 3500 FY16E 



Page 16

Exhibit 34: Impact of cost escalation and realisation growth sensitivity on target price 

Realisation growth rate (%) 

242 0.0% 2.0% 5.0% 8.0% 10.0% 

0.0% 231 237 247 258 266 

2.0% 229 235 245 256 264 

5.0% 226 232 242 253 261 

8.0% 222 228 238 249 257 

10.0% 219 226 236 247 254 


Cost escalation (%) 

We have assumed a conservative cap rate of 11% for the 

commercial projects. An increase/decrease of 1% in the 

cap rate would lead to a change in our target price to | 234 

and | 251 per share, respectively 

Exhibit 35: Impact of cap rate sensitivity for commercial projects on target price 

Oberoi Mall Commerz I 

Commerz II 

Phase I 

Commerz II 

Phase II Target price 

8% 29.8 20.4 28.2 34.6 275 

9% 26.5 18.2 25.1 29.9 261 

10% 23.9 16.3 22.6 26.1 251 

11% 21.7 14.9 20.5 23.0 242 

12% 19.9 13.6 18.8 20.4 234 


Cap Rate 

Exhibit 36: Impact of discounting rate sensitivity on target price 

Goregaon Andheri Mulund Worli Target Price 

13% 161.8 17.4 17.5 4.5 249 

14% 159.2 17.1 16.9 4.2 245 

15% 156.7 16.8 16.2 3.9 242 

16% 154.4 16.5 15.6 3.7 238 

17% 152.1 16.3 15.1 3.4 235 


Discount Rate 

Exhibit 37: One year forward P/BV 

500 

400 

300 

200 

100 

0 

Nov-10 Apr-11 Sep-11 

CLOSE P/BV 2.5 P/BV 2 P/BV 1.5 P/BV 1 P/BV 0.5 

Price 



Page 17

Financial Snapshot 

Exhibit 38: Profit & loss account 

(| Crore) FY09 FY10 FY11 FY12E FY13E 

Net Sales 425.4 777.2 984.3 1,129.5 1,765.0 

Other Operating Income - 12.7 11.7 12.2 13.4 

Total Operating Income 425.4 789.9 996.0 1,141.7 1,778.5 

Other Income 29.5 15.6 62.7 150.3 137.3 

Total Revenue 454.9 805.5 1,058.8 1,292.0 1,915.8 

Raw Material Expenses 159.6 304.3 376.6 462.4 727.3 

Employee Expenses 8.7 7.0 27.0 29.7 32.7 

Other Expenses 9.7 5.1 15.3 16.9 18.5 

Total Operating Expenditure 178.0 316.4 419.0 509.0 778.6 

EBITDA 247.4 473.4 577.0 632.7 999.9 

Interest 0.4 0.0 0.2 0.3 - 

PBDT 276.5 489.0 639.6 782.7 1,137.2 

Depreciation 7.3 9.1 23.7 24.0 33.2 

PBT 269.2 480.0 615.9 758.7 1,104.0 

Total Tax 17.7 22.6 98.3 189.1 369.8 

PAT before MI 251.5 457.4 517.6 569.6 734.2 

Minority Interest - - - - - 

PAT after MI 251.5 457.4 517.6 569.6 734.2 

Less: Prior Period Items (0.8) (0.8) 0.5 0.5 - 

PAT 252.3 458.2 517.2 569.1 734.2 

EPS 7.7 14.0 15.8 17.3 22.4 

Exhibit 39: Balance sheet 


Equity Capital 2.6 288.7 328.2 328.2 328.2 

Preference Capital 57.1 35.9 35.9 35.9 35.9 

Reserve and Surplus 1,383.5 1,539.3 2,983.4 3,552.5 4,286.7 

Total Shareholders funds 1,443.2 1,863.8 3,347.6 3,916.7 4,650.8 

Total Debt 10.7 - - - - 

Total Liabilities 1,453.9 1,863.8 3,347.6 3,916.7 4,650.8 

Assets 

Gross Block 283.7 325.8 799.6 1,105.6 1,105.6 

Less Accumulated Depreciation 9.6 18.8 41.5 65.5 98.7 

Net Block 274.1 307.0 758.1 1,040.1 1,006.9 

Capital WIP 385.1 510.1 211.0 80.0 204.6 

Total Fixed Assets 659.1 817.0 969.1 1,120.1 1,211.6 

Investments 15.0 79.0 65.0 65.0 65.0 

Inventory 712.2 619.4 774.2 971.6 1,132.7 

Debtors 27.2 40.4 46.8 53.6 83.8 

Loans and Advances 272.5 625.9 716.3 977.9 1,140.2 

Cash 166.0 360.7 1,399.3 1,512.4 1,863.1 

Other Current Assets 0.5 5.2 17.3 8.5 31.8 

Total Current Assets 1,178.4 1,651.6 2,953.8 3,524.0 4,251.6 

Creditors 396.2 674.5 600.2 742.7 822.1 

Provisions 3.1 9.7 41.0 50.7 56.1 

Net Current Assets 779.1 967.4 2,312.6 2,730.7 3,373.4 

Deferred Tax Assets 0.7 0.4 0.9 0.9 0.9 

Total Assets 1,453.9 1,863.8 3,347.6 3,916.7 4,650.8 



Page 18

Exhibit 40: Cash flow statement 


Profit after Tax 252.3 458.2 517.2 569.1 734.2 

Depreciation 7.3 9.1 23.7 24.0 33.2 

Cash Flow before working capital changes 259.6 467.2 540.9 593.1 767.3 

Net Increase in Current Assets (159.4) (278.5) (263.6) (457.2) (376.8) 

Net Increase in Current Liabilities 44.4 284.9 (43.0) 152.1 84.8 

Net cash flow from operating activities 144.6 473.6 234.3 288.1 475.3 

(Purchase)/Sale of Fixed Assets (230.1) (167.0) (175.7) (175.0) (124.6) 

Net Cash flow from Investing Activities 137.6 (230.7) (162.2) (175.0) (124.6) 

Inc / (Dec) in Equity Capital - 286.1 39.6 - - 

Inc / (Dec) in Loan Funds (110.1) (0.0) - - - 

Inc / (Dec) in Loan Funds (22.7) (10.7) - - - 

Net Cash flow from Financing Activities (162.2) (48.2) 966.5 - - 

Net Cash flow 120.1 194.7 1,038.6 113.1 350.7 

Cash and Cash Equivalent at the beginning 45.9 166.0 360.7 1,399.3 1,512.4 

Closing Cash/ Cash Equivalent 166.0 360.7 1,399.3 1,512.4 1,863.1 


Exhibit 41: DuPont analysis 

(%) FY09 FY10 FY11 FY12E FY13E 

PAT/PBT 93.7 95.5 84.0 75.0 66.5 

PBT/EBIT 112.1 103.4 111.3 124.6 114.2 

EBIT/Sales 56.4 59.8 56.2 53.9 54.8 

Sales/Asset 29.3 41.7 29.4 28.8 38.0 

Asset/Equity 100.7 100.0 100.0 100.0 100.0 

ROE 17.5 24.6 15.4 14.5 15.8 


Exhibit 42: Key ratios 


Per Share Data (|) 

EPS 7.7 14.0 15.8 17.3 22.4 

Cash EPS 7.9 14.2 16.5 18.1 23.4 

BV 44.0 56.8 102.0 119.3 141.7 

Operating profit per share 7.5 14.4 17.6 19.3 30.5 

Operating Ratios (%) 

EBITDA / Total Operating Income 58.2 59.9 57.9 55.4 56.2 

PAT / Total Operating Income 59.3 58.0 51.9 49.8 41.3 

Return Ratios (%) 

RoE 17.5 24.6 15.4 14.5 15.8 

RoCE 16.5 24.9 16.5 15.5 20.8 

RoIC 17.4 29.4 23.9 19.0 23.1 



Page 19

Exhibit 43: Key ratios 


Valuation Ratios (x) 

EV / EBITDA 28.4 14.4 10.0 9.0 5.3 

P/E 28.2 15.5 13.8 12.5 9.7 

EV / Net Sales 16.5 8.8 5.9 5.0 3.0 

Sales / Equity 0.3 0.4 0.3 0.3 0.4 

Market Cap / Sales 16.9 9.3 7.3 6.4 4.1 

Price to Book Value 4.9 3.8 2.1 1.8 1.5 

Turnover Ratios (x) 

Asset turnover 0.3 0.5 0.4 0.3 0.4 

Debtors Turnover Ratio 15.7 19.2 21.1 21.1 21.1 

Creditors Turnover Ratio 1.1 1.2 1.6 1.5 2.1 

Solvency Ratios (x) 

Debt / Equity 0.0 - - - - 

Current Ratio 3.0 2.4 4.6 4.4 4.8 

Quick Ratio 2.5 1.9 2.4 2.5 2.7 



Page 20

Appendix 

Land bank details 

Exhibit 44: Residential projects details 

Saleable Area ( Area sold/ booked for sale 

Project Name Location Status 

sq ft) 

(sq ft) 

Oberoi Splendor Andheri (E) Ongoing 1,279,152 1,192,296 

Oberoi Exquisite Goregaon (E) Ongoing 1,506,810 772,570 

Oberoi Splendor Grande Andheri (E) Ongoing 283,920 109,200 

Oberoi Esquire Goregaon (E) Ongoing 1,970,530 439,860 

Oasis - Residential Worli Ongoing 1,541,738 - 

Oberoi Exotica I Mulund (W) Planned 1,619,800 - 

Oberoi Exotica II Mulund (W) Planned 1,581,580 - 

Oberoi Esquire II Goregaon (E) Planned 1,678,600 - 

Sangam City Pune Planned 773,951 - 

Total Residential 12,236,081 


Exhibit 45: Retail projects details 

Saleable Area ( Area sold/leased 

sq ft) (in sq ft) 

Rev per sqft./month 

on area leased (|) 


Oberoi Mall Goregaon (E) Operational 552,893 520,671 127 

Oasis - Mall Worli Ongoing 121,095 - 

Sangam city -Retail Pune Planned 279,939 - 

Total Retail 953,927 


Exhibit 46: Commercial projects details 


Saleable Area ( 

sq ft) 

Area 

sold/leased (sq 

ft) 

Rev per 

sqft./month on 

area leased (|) 

Commerz I Goregaon (E) Operational 364,888 275855 132 

Commerz II Phase I Goregaon (E) Ongoing 725,769 - 

Commerz II Phase II Goregaon (E) Ongoing 1,661,650 - 

Oasis - Commercial Worli Ongoing 242,190 - 

Oberoi Splendor - Maxima Andheri (E) Ongoing 318,804 - 

Oberoi Splendor IT Tower Andheri (E) Planned 93,873 - 

Oberoi Splendor Prisma Andheri (E) Ongoing 711,577 - 

Sangam City - Commercial Pune Planned 279,939 - 

Total Office space 4,398,690 


Exhibit 47: Hospitality projects details 

Project Name Location Status Saleable Area ( sq ft) No of rooms 

The Westin Mumbai Goregaon (E) Completed 381,820 269 

Oasis - Hotel Worli Ongoing 215,280 125 



Page 21

Appendix 

ORL offers quality play on Mumbai Realty… 

ORL is an established brand name with a strong track record of 

development in the suburbs of Mumbai offering premium residential and 

commercial properties. The brand name of the company is reflected in 

the premium pricing and the offtake in its product offerings. ORL is known 

for its diversified offering. Most of its development plans also include 

commercial and retail development along with residential offerings 

making it an attractive proposition for customers. The company has a 

strong presence in the Mumbai market with projects in Mumbai (Worli) 

and its suburbs (Goregaon, Andheri [East and West] and Mulund). 

The quality and timeliness in execution of ORL is also ensured given the 

fact that all ongoing projects are contracted to L&T, which has a strong 

execution record with high specifications. The company has also played 

the cycle well as it has acquired most of its land by 2005 before prices 

started spiralling up in the Mumbai market. The management has also not 

gone overboard in buying land at premium prices. 

Exhibit 48: Segment-wise developable area break-up (%) 

10.6% 

5.1% 

3.2% 59.6% 

21.6% 

Residential Office space Retail Hospitality Social Infrastructure 


ORL currently has five development projects under its portfolio. Out of the 

same three projects (Goregaon, Andheri [East] and Worli) are ongoing, 

which are under construction while two projects (Mulund and Sangam 

City, Pune) have been planned and are awaiting a few clearances. 

ORL currently has five development projects under its 

portfolio 

Key projects summary 

Oberoi Garden City – Goregaon, Mumbai 

It is an integrated development on ~ 84 acres of land in Goregaon in the 

western suburbs of Mumbai, adjacent to the Western Express Highway. 

The project at Oberoi Garden City involves mixed-use development of 

residential, office, retail, hotel and school projects. The company has so 

far completed Oberoi Woods (saleable area – 598200 sq ft) in the 

residential space, Commerz I (saleable/leasable area – 364888 sq ft) in the 

commercial space, Oberoi Mall (saleable/leasable area – 552893 sq ft) in 

the retail space, Westin Hotel in the hospitality space and a school as 

social infrastructure. 


Page 22

Exhibit 49: Oberoi Garden City project details 

Project Type Status Area (sq ft) 

Rehabilitation Project Residential Completed 56,794 

Oberoi Woods Residential Completed 598,200 

Oberoi Seven Residential Completed 39,550 

Oberoi Esquire Residential Ongoing 1,970,530 

Oberoi Esquire II Residential Planned 1,678,600 

Commerz I Commercial Operational 364,888 

Commerz II Phase I Commercial Ongoing 725,769 

Commerz II Phase II Commercial Ongoing 1,661,650 

Oberoi Mall Retail Operational 552,893 

The Westin Mumbai Hospitality Completed 381,820 

Oberoi International School Social Infrastructure Completed 305,309 

Education complex Social Infrastructure Planned 866,130 

Hospital Social Infrastructure Planned 375,481 


Oberoi Splendor – Andheri (East), Mumbai 

While all residential projects in Oberoi Splendor have 

already been launched, three commercial projects are still 

to be launched 

Oberoi Splendor is a mixed-use development comprising residential, 

office and social infrastructure projects. ORL is close to completion of 

Oberoi Splendor and has launched Splendor Grande (residential) and 

Splendor-Maxima (commercial) projects. 

Exhibit 50: Oberoi Splendor project details 


Oberoi Splendor Residential Ongoing 1,279,152 

Oberoi Splendor Grande Residential Ongoing 283,920 

Oberoi Splendor - Maxima Commercial Ongoing 318,804 

Oberoi Splendor IT Tower Commercial Planned 93,873 

Oberoi Splendor Prisma Commercial Ongoing 711,577 

Oberoi Splendour - School Social Infrastructure Planned 430,990 


Oasis Realty – Worli, Mumbai 

Oasis Realty is a JV between OCPL (subsidiary of ORL), Skylark Build and 

Shree Vrunda Enterprises to develop a mixed-use development of ~2.1 

msf of saleable area in Worli. As a JV partner, OCPL will be responsible 

for developing the free-sale portion arising from the slum redevelopment 

project being undertaken on the property. The rehabilitation component 

of the slum redevelopment project is the responsibility of the other JV 

partners. 

For the residential, office space and retail components of the 

development, the share of net revenues has been calculated on the basis 

of the sale price per sq ft according to a graded scale, pursuant to which 

OCPL will receive 25-40% of net revenues depending on the sale price per 

sq ft of each premises. For the hospitality component, OCPL will receive a 

36.25% share of net revenues, provided that construction of the hotel 

premises is performed by OCPL. 

Exhibit 51: Oasis Realty (Worli) project details 


Oasis - Residential Residential Ongoing 1,541,738 

Oasis - Commercial Commercial Ongoing 242,190 

Oasis - Mall Retail Ongoing 121,095 

Oasis - Hotel Hospitality Ongoing 215,280 



Page 23

Oberoi Exotica – Mulund (West), Mumbai 

The company plans to develop 3.2 msf of residential space over two 

phases on 18.8 acres of land. The land acquired in 2005 from 

GlaxoSmithKline has faced regulatory hurdles and is awaiting MoEF 

approval. The land was originally declared as forest land and ordered the 

same in the High Court. Subsequently, ORL appealed against the High 

Court order and got relief from the Supreme Court allowing ORL to 

construct and create third-party interest. However, the Supreme Court 

also gave a qualification saying they need MoEF approval, which the state 

government needs to apply for. The state government has applied for the 

MoEF approval and it is still awaited. 

Exhibit 52: Oberoi Exotica project details 


Oberoi Exotica I Residential Planned 1,619,800 

Oberoi Exotica II Residential Planned 1,581,580 


Sangam City -Pune 

ORL holds 31.67% interest in Sangam City Project. The Sangam City 

Township has entered into agreements to acquire development rights 

with respect to ~65 acres of land, which will be developed as a mixed use 

development, comprising residential, office space and retail components 

in the Sangamwadi area of Pune. The permission for conversion of the 

land from agricultural to non-agricultural use is under process and the 

company is awaiting clearance for the same. 

Exhibit 53: Sangam City project details 


Sangam City Residential Planned 773,951 

Sangam City - Commercial Commercial Planned 279,939 

Sangam city -Retail Retail Planned 279,939 



Page 24

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ICICIdirect.com Research Desk, 

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