This realty stock has jumped 7% so far this year, outperforming Nifty; analysts see up to 16% more upside

This realty stock has jumped 7% so far this year, outperforming Nifty; analysts see up to 16% more upside

Domestic share market continued to swing between gains and losses on Wednesday as benchmark Nifty 50 tested 17,550 levels, whereas the S&P BSE Sensex was flat at 59,015 levels. Broader markets, meanwhile, outperformed frontline indices as Nifty Smallcap 100 and Nifty Midcap 100 gained up to 0.7%. Sectorally, Nifty Media and Nifty Realty held the fort as they gained over 1%. Nifty Auto, Nifty IT, and Nifty Pharma, however, were bogged down in trade. Amid the persistent volatility, stock specific approach may help investors accumulate quality stocks, and pocket returns. Analysts at Motilal Oswal believe Oberoi Realty may be a good stock pick from the real estate sector. The stock has rallied 7% so far this year, outperforming Nifty Realty index which has tumbled 8% YTD.Investment rationale

360-West – Improved traction amid limited luxury RTMI supply

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Pricing likely to pick-up given limited RTMI luxury supply

While Motilal Oswal has built-in a pick-up in sales velocity in near term due to the pent-up demand, sustenance of high sales velocity is expected to lead to faster-than-expected cash flows and meaningful re-rating potential for the stock. The brokerage believes that pricing is likely to pick-up given limited RTMI luxury supply. Considering limited RTMI supply of luxury projects in the vicinity, the pricing for 360-West is also likely to pick-up to Rs 100,000-120,000/sqft as indicated by the management, resulting in a revenue potential of Rs 7,500 crore for the balance inventory in Tower B.

FY23 pre-sales estimates at Rs 4,800 crore

While the company has set ambitious sales targets for 360-West, analysts for now retain their FY23 pre-sales estimates at Rs 4,800 crore with contribution of Rs 750 crore coming from 360-West. “We will closely monitor the pick-up in sales and pricing trajectory for the project from hereon and revise our estimates accordingly,” the said. Apart from sustenance of high sales velocity in 360-West, the brokerage firm sees multiple rerating triggers in Oberoi Realty including: the launch of Thane project and customer response to the same, new project additions in its core markets of Mumbai MMR, and entry into newer markets of NCR as reported by media.

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Oberoi Realty: BuyTarget price: Rs 1,100 | Upside: 16%

Motilal Oswal analysts believe that healthy cash generation will provide a lot of comfort to Oberoi in seeking aggressive business development opportunities that will provide further growth visibility. “We maintain our BUY rating on OBER with an SOTP-based TP of Rs 1,100 (unchanged), indicating 16% upside potential,” they said. Oberoi Realty share were quoting at Rs 958 apiece, up 0.7% on NSE today.

(The stock recommendation in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)