Oberoi Realty Ltd
NSE:OBEROIRLTY
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
1 285.15
2 317.1
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Oberoi Realty Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Oberoi Realty Q4 FY '23 Earnings Conference Call. We have Mr. Oberoi, the Chairman and Managing Director of the company; and Mr. Saumil Daru, Director of Finance of the company, with us for the call. Please note that this call will be for 30 minutes. [Operator Instructions] This conference call is being recoded and the transcript for the same may be put up on the website of the company. [Operator Instructions]
Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call is partly based on the historical information or facts and may be forward-looking statements, including those relating to general business statements, plans, strategy of the company, the future financial condition and growth prospect. The forward-looking statements are based on the expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by such statements.
I now hand the conference over to Mr. Oberoi, the Chairman and Managing Director of the company. Thank you, and over to you, sir.
Thank you. Good morning, good afternoon, good evening to all of you as for the time zones from which you have logged in, and welcome to the conference call of fourth quarter financial year 2023 results and business updates. Thank you all for taking time out for this call.
I am very excited to inform you that we have delivered our best annual profitability for growth, which are indicative of our margins, efficiency and execution ability.
Demand for housing has been continuously growing, driven by aspirations of continued homeownership by end users. The retail segment is experiencing phenomenal support and growth across consumption.
Before I begin, I would like to share with you a few quick business updates. We have achieved the highest ever consolidated profit after tax of INR 1,904 crores for this financial year 2023. We've also achieved the highest ever gross booking value of over INR [5,100] crores for this financial year 2023.
With this, I will now open the floor for question and answer, and both, Saumil and I, will be happy to take your questions. Thank you.
[Operator Instructions]
The first question is from the line of Murtuza Arsiwalla from Kotak Securities.
Just want to clarify, this is the cash flow of the current quarter and full year. We understand a large part of that is to do with 360 West. Can you just give us a sense of how much was the outflow for inventory? The inflow against investment in Oberoi Realty.
And more importantly, because we see a sharp spike on the receivables. So what is that, whether that is also related to this transaction? And if so, when should that receivables monetize itself?
Hi. Saumil Daru here. As far as the receivables are concerned, the receivables primarily -- I mean, if I look at debtors, that's what you are talking about, right?
Yes.
In a consolidated financial statement and if you look at our notes to the results also, we have said that we have eliminated profit of the transaction that we have done with [indiscernible]. So typically, you tend to ignore any of the related party transactions. So the debtors that you see over there are pure third-party debtors. These are basically from the projects Mulund, SkyCity and Goregaon. The thing that also happens is for whatever you have sold in that one quarter, you typically end up giving customers anywhere between 60 to 90 days to come up to speed with whatever you have to pay. So that all ends up reflecting as debtors. But yes, they are relatively higher because also the fact that Mulund had 100% revenue recognition, and we are in the process of handing up -- handing over our possession.
So as and when we go over there, we'll also keep paying the [indiscernible] will go down. So we are quite confident that in the next quarter or two, you will see the receivables come back to a very normal levels. So that was the one thing.
The second bit was about Worli, right?
Yes.
Yes. So Worli, the transaction is very simple. On my balance sheet earlier, you have seen that amount getting reflected as investment invoices, okay? Worli is not motor subsidiary it was not a full consolidation. It was only an equity method for consolidation. So you only saw one line item, which was investment in [indiscernible] as far as the P&L was concerned, you only saw one line item, which was our share of profit in joint ventures.
Consequent to this transaction, what has happened is that investment in [indiscernible] has got reflected as investment in inventory as far as [Oberoi] is concerned.
And that inventory was a full transaction. So whatever amount which you had to pay as a consideration obviously, that consideration was about close to INR 3,300 crores as we mentioned to you and that was way higher than the amount that we had put in. So that differential was funded through a bank borrowing, and that is why you are seeing that differential amount of borrowings or rather than net debt in the quarter has increased.
So essentially, that debt has -- some part of debt has funded it, but the rest of it is my investment has got replaced by what you can say by the inventory, [ 360 lakhs ].
The investment would be of the order of about INR 2,000-odd crores?
Yes. Prior to the transaction.
Prior to the transaction here. Fair enough. If I could just put in one more [indiscernible]. Saumil, sir, for the original land parcel, if you could give me a number of what the revised potential of that land looks like?
Very valid question. In fact, this is one thing that we have been holding our entire development for. Today, we have also acquired NuStar [indiscernible]. Collectively put together, we are looking at close 215 million square feet of development there. So it's now at full potential probably as big or bigger than [Mulund].
Okay. And this is all 100% economic interest, would be?
100% economic interest. The other one is another, give or take, probably 2.5 million square feet.
[indiscernible]
2.5 million. It's 77% interest.
The next question is from the line of Parvez Qazi from Nuvama Group.
Sir, the first question is on [indiscernible] when can we see the two launches in Thane? And the second question, when would we see [indiscernible] launch in [indiscernible]?
Thane launch, we are expecting to now to lead -- now we have raised, so we don't want to do that. We will be happy to know that we started work at one site. And at both sites, our experience centers and so apartments are ready. So technically, one wants to trigger. one can start looking at one site probably as we speak. And in the other one, we are probably 2 months away. We had to resubmit our plan, get them approved under unified DCR and all that. So we are probably going to do it in the festivity [indiscernible].
But certainly, in the next quarter also or maybe a quarter after that. That's about it.
And Goregaon?
Again, that is a work in progress. Even now like once we signed the definitive agreement, we will then immediately start to work on it.
Sure. And my last question [indiscernible] and with the assets of [indiscernible] wanted to get your views on the [indiscernible]?
Sorry, I didn't hear your full question. You were breaking in between.
So I just wanted to get your views on the Borivali mall and the Commerz III commercialization.
So Commerz III is being delivered in March of 2024. We are pretty much casting the last few plans. If you happen to pass by you see, it's a beautiful 15-story building. And we are absolutely on schedule there. Borivali Mall also, we look at starting 2024 -- early 2024, early to mid-2024 is when we tend to launch the mall itself.
We have the next question from the line of Ashwani Agarwala from Edelweiss Mutual Fund.
Sir, if you see, we had plans to launch the [indiscernible] property in the third quarter of last year, and that has been postponed to the first quarter of this year and even the [indiscernible] loans. So apart from the environmental problems, were there any other causes for us to delay what our plans [indiscernible] more aggressive.
No, not really. In fact, there weren't any environment problems also. They are all routine approvals that one needs to take. We obviously have decided to completely move into the UB CPR. So we had to take approvals again, which we have already taken. And like I said, both our experience centers are ready and we will then -- we wanted to be right on the product mix, the product design, all of that is now done. And we have a far clearer and definite timeline, like I said, that it will probably happen in the next quarter or the quarter after that, not later than that. We are fully primed right now.
In terms of TCs wins, how much pieces are we expecting this year? And how much of business development you can expect?
We don't give forward-looking statements. You know that. And if you've seen like past years and all we've always done better than what we did in the past. So we would always strive and try to do better than what we've done.
Okay. And we were also having to go into other geographies, especially and if you have any update there?
Now again, like, I mean, it's work in progress. Hopefully, if things culminate into something that we can come back to you we will surely make sure that you guys will win in advance. And I mean, as it happens.
The next question is from the line of Dhruvesh Sanghvi from Prospero Tree.
Congratulations on great number. Just to understand in terms of breakover and a bit of delays which happened and we heard some demonstrations by some users in [indiscernible] certain parts of Asia. Does it affect our resales in the near term or on the long-term basis and what are you learning out of this in terms of managing this entire ecosystem better so that this doesn't even come as a small negative point at all?
Frankly, COVID was a bit of a disruptor, and obviously, like third-party contracts that we have given them obviously couldn't survive the onslaught of COVID. And so we have the developers work with third-party. So as we give civil contracts to one person, then we give plumbing, electrical, mechanical, HVACs, all other items to two different contractors. So we obviously had some challenges there, but we were able to finish a large part of the building, and that's why we got part of the patient certificate to a particular level. And we were just about able to manage those timelines. And yes, I mean, like going forward, we now are tightening our entire execution process and going to a top company and we as a company can afford to give more money to our contractor. So yes, that's about it. There is enough learning, and we will make sure that we implement this going forward.
Okay. And one more aspect in terms of -- I understand we don't give guidance. But directionally, now, I think we have five sites or five attachments of Mumbai that we have captured. But is it that okay, if we really want to scale for a long haul, do you have to reach to a target of 10 micro markets in Mumbai? Is that directionally you're correcting to [indiscernible] think and plan is our leading correct in that angle?
Sorry, do we have what? I didn't hear that word.
I'm saying we are in the -- we are in 5 micro markets in Mumbai right now. And we -- if we have to really scale much bigger than what we are currently, do we eventually have to think like having 8 to 10 micro markets at a point in time running in Mumbai within the next 4 to 5 years? Is that directionally a correct path?
The ratio thought is absolutely correct. And if one has to grow, you will have to tap more micro market. And we are constantly looking at land parcels at different locations. In fact, we are always more aggressive, and we do not have a presence like we've let go of a few land parcels in Thane because we already have a good presence in Thane. It could probably have got two more land parcels but we let them go by because we already have presence there. So one doesn't need to go there. But if there is about where I'm not present, I would love to get a little more aggressive there in [indiscernible]. So your reading of that strategy is absolutely right.
And I'll just squeeze in one last piece here. So is there any update on the Centa Hotel case, which was going online? And if you can -- whatever is possible to share there.
Not really. The matter is [ indiscernible ]. So we don't have much to say anything on that account.
The next question is from the line of Neil Mehta from Investec Capital.
Congrats on a great quarter. I just had one question on the math for the inventory numbers for 360. So we had attained [ 15.6 lakh square feet ] as on Q2 '23 and we've disclosed around [ 5.28 lakh square feet ] as on Q4. So how exactly do we reconcile the production in inventory?
So two things. Neil, the first thing, which I want to begin, which is that as far as our entire current quarter's presentation is concerned, all the numbers that you see, all the areas that you see are now carpet areas. All the presentations that we do prior to this based on an overall [salable area] or what people call the salable area. However, this year, this quarter and that's reflected in all of our slides also where we have said that we have reworked it. So the area of inventory that you're talking about as far as Worli was concerned of [ 15 lakh odd square feet ], that was on a salable basis that was not RERA carpet area. So what we have done is -- and that's why I said, everything is now reconciled to RERA carpet. So it becomes easy for us to track the vis-a-vis what you can say, our agreements and everything.
So that was -- once we do that and everything gets reconciled to RERA, then the differential is not that 10 lakh square feet. And essentially, even when we were doing this transaction out of the year we have explained that -- post this transaction -- I mean, along with the transaction which needed, there are also a whole bunch of sales in OSS to other parties. The cash flow from that went to the JV partners. And after we have exited from the JV, the partner has limited inventory, which is left as far as OSS is concerned. We are the ones who are setting with a majority of the inventory as far as 360 is concerned.
So in terms of units, would that be around 60-odd units. Saumil, would that be correct identity?
Yes. We have about 63 or 64 units.
Okay. And on a comparable basis, would you have the RERA carpet criteria for Q4, '22, [indiscernible] Q2 [indiscernible] so that we can...
We are not ready, but I can check that and come back.
Sure. I'll connect with you offline then.
The next question is from the line of Sameer Baisiwala from Morgan Stanley.
Quickly, has there been sets of pricing action in Mulund and Goregaon can see that your ASCs have moved up quite substantially 10% to 15% quarter-on-quarter?
You know Goregaon, we did increase our prices. Mulund also like the fact that you see probably net and gross of GST, that is one part. Plus, in Mulund, now we are selling higher tours. So that also gives us a higher realization. And yes.
Okay. So in Goregaon, you have taken price increase, but in Mulund, it's not?
Correct, correct.
Mulund also marginally increase. And like I said, it's now gross up with the GST after [indiscernible].
Yes. Okay, got it Yes. Great. And just looking at the unsold but completed inventory, both in Mulund and 360 [West] were fairly substantial. So how do you see the sell-down going forward? Any timelines that you want to share with us.
So Sameer, you know that actually has in the past, turned out to be our strength. We were less inventory able to buy honey when we had that in acquire. So we actually feel that this is literally like potential for us. I mean this is literally [ cars ] sitting on in the form of ready inventory. Both these buildings are now complete. And if you see the [indiscernible] Mulund also has gone up, it's now pretty much in comparison with how Borivali was selling. So I think in our own mind, in the next 2 years or 3 years we'll be done with the entire inventory.
Okay. That would be great.
This is a realistic timeline we could get a little more aggressive also, but I feel that this is something we can easily achieve.
That sounds great. And just finally, we talked about the two rental assets, Borivali Mall and Commerz III. But if I do some ballpark [indiscernible] cancellations, do you think -- it could be INR 500 crores sort of a rental from Commerz and 350, 400 from Borivali on high 90% utilization. Is that something occupancy level? Do you think these numbers are realistic?
I mean your ballpark is very close to our real numbers, yes. So we are in those -- we are in that.
The next question is from the line of Pritesh Sheth from Motilal Oswal Financial Services.
First, just calculation you said earlier on an delivering potential. So you said 15 years with -- within Mulund and 1.5 investment in [indiscernible] that is on carpet area basis or it is [salable area] as you're transitioning to CapEx or just a clarification?
So we will -- this will pretty much be [carpet] area.
Okay. Good. And any update on Worli land and provide any decision there?
No, this is [indiscernible].
So any timelines you want syndicate on early [indiscernible] that? [indiscernible]
Yes, we are waiting for certain policy decisions. Once we have that, we then take a firm call this is that we'll probably be able to tell you what sort of timeline we are looking at.
The next question is from the line of Kunal Lakhan from CLSA.
Saumil, adjusted for the Worli transaction, how much would be the operating cash flow? If you exclude the Worli transaction?
I can -- it will be kind of -- if you take out the INR 3,300 crores -- if you add the INR 3,300 crores, it is negative INR 2,200 crores. It would be about positive INR 1,000-odd crores.
Yes, that's what I was coming to because the collection seems to be better this quarter considering over the last quarter.
Because we had -- after that OC in Mulund, in the December quarter, the operating cash flows took a hit because we had a profit recognition, but we were not connecting. So that was turned around in this quarter because the collection trailing, but the profit has already been recognized in the earlier quarter.
Got it. Correct, correct. So about INR 1,100-odd crores of operating cash flow?
Roughly.
Okay. Secondly, because you -- sorry, I missed out on what you said earlier, on [indiscernible], you said the launch would be in Q2 or Q3.
Correct.
We would probably launch within one quarter of each other. So that's how we are getting ready with.
Got it. And on [indiscernible], you have applied for you moved to the new [indiscernible] approvals and your ratings at.
Both the projects we applied under UDCPR. Both the projects we have already got approval under UDCPR. So we just didn't want to go into the old rooms because like -- yes, we believe that it's not a great idea. We'd rather be in the new regime and the new rule that's easier for everyone, and yes.
Also, like with the new approvals or not [indiscernible] you got them. So can you give us some color on what is this -- what is the development you're planning, especially on the [indiscernible] 15 million square feet of [indiscernible].
We are doing residential. We are doing a [indiscernible] hotel because we want to brand the entire development. We are also doing international [ pool ] there. We have seen that Goregaon has been a big growth because of the international school, we have. Today, it's where people want to stay because education is prime and with the kind of development we are doing in Thane, I think an international school will act as a big differentiator with other development.
And we are going to be starting hotels, school, residential all together. The first process will comprise of all these. We will pretty much be attacking almost -- anywhere between 3 million and 4 million [indiscernible] one way.
Already, the hotel and the international school. We are designing for these two hotel and -- we will shortly be announcing the brand also.
And no plans of commercial and retail there?
Again, not for now, but we may do a small retail, which probably will be more neighborhood retail. It could be anywhere between INR 1 lakh and 2 lakh square feet.
We will be doing a very high-end club. There also a sports club, in line with what we've done in Borivali. So we really want to change the spectrum of what we are producing here. So we're very excited. We've hired some of the top resources available in the world. And yes, the design is really looking very good.
Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to Mr. Oberoi for closing comments. Over to you, sir.
Thank you all for taking time out for this call. We look forward to hearing from you on an ongoing basis. Please feel free to reach out to us or our investor team. And then if you have any new questions. Thank you once again.
Thank you, everybody.
Thank you. On behalf of Oberoi Realty, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.