Oberoi Realty Limited (NSE: OBEROIRLTY) Q3 2025 Earnings Call dated Jan. 21, 2025
Corporate Participants:
Vikas Oberoi — Chairman & Managing Director
Saumil Daru — Director, Finance & Chief Financial Officer
Analysts:
Parikshit Kandpal — Analyst
Kunal Lakhan — Analyst
Puneet Gulati — Analyst
Biplab Debbarma — Analyst
Pritesh Sheth — Analyst
Akash Gupta — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Oberoi Realty Q3 FY ’25 Earnings Conference Call. We have Mr. Oberoi, the Chairman and Managing Director of the company and Mr Taru, Director of Finance of the company with us for the call.
Please note that this conference call will be for 30 minutes. And for the duration of this conference call, all participant lines will be in the listen-only mode. And this conference call is being recorded and the transcript for the same may be put up on the website of the company. After the management discussion, there will be an opportunity for you to ask questions. Should anyone need assistance during the conference call, you may signal the operator by pressing star than zero on your touchstone telephone.
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 may not be based on 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 conditions and growth prospect. The forward-looking statements are based on expectations and projections and may involve 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 call to Mr, the Chairman and Managing Director of the company. Thank you, and over to you, sir.
Vikas Oberoi — Chairman & Managing Director
Thank you. Good morning, good afternoon, good evening to all of you as per the time zones from which you have logged-in, and welcome to the conference call Q2 FY 2025 results and business updates. Thank you all for taking time-out to hear this call. Before I begin, I would like to share a few quick business updates. I’m happy to announce another healthy quarter, driven by tremendous response to our first phase Jardine launch at our integrated development overall Garden City, Thane and also strong quarter performance across our annual annuity assets.
The leasing interest continues to be strong across all office assets with commerce and commerce to achieving over 95% occupancy. On the business development front, we have just concluded a transaction by acquiring Lifestyle Realty Private Limited and entered into a joint development agreement for 81 acres at Alibank. We’ve also been appointed as developers by SRA, which has a free sale potential of about 3.2 lakh square feet. This is at Reclamation.
With this, I now open the floor for questions-and-answers and both Somal and I will be happy to answer your questions. Thank you.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles, the first question comes from the line of Parikshit with HDFC Securities. Please go-ahead.
Parikshit Kandpal
Yeah. Hi, Vikas. Congratulations on a decent quarter. Sir, my first question is on — yeah, sir. Sir, my first question is on pre-sales. I mean, this quarter the expectation was really high. We were — we have been hearing a lot of deals on 360 West through the media, but there has been a disappointment there. And even in Borivali, we have seen this quarter has been relatively soft. So if you can underline what were the reasons why was this kind of underperformance during this quarter on the pre-sales side.
Vikas Oberoi
So Parikshit, we basically look at our sales in the entire year and not literally per quarter. And you must also appreciate that typically a project like, the decision-making time is normally anywhere between three and four months. So the last quarter that you saw, which looked great was a buildup of a previous quarter and this quarter also, we continue to have great interest. It will just culminate into deals in the next quarter. So really nothing much to read as such on that.
And as far as Borivali goes, we’ve improved and increased our price because you know, we have seen that resale in our projects were happening at 20% to 25% higher than what we were selling at. All we have done is we have also brought our own residual stock, which is very little to current market prices. And these market prices are not set by us. These are set by buyers who are buying at resale and you also know that we have one entire tower left to be sold. So we thought that it’s a good idea to kind of start setting up the price. And that’s exactly what we’ve done. You would have seen something similar happen when we increased price in also.
You know people take time to absorb pricing. Once they do that, they — the same velocity comes back. And again, if you see worldly, we have been able to sell apartments at almost INR150,000 a square-foot on and these are large transactions. So I’m just saying that we are also like trying to maximize on whatever one can given the way the market is and where the product is and where the brand or the company is positioned today. So all-in all, I mean, if you really see the entire growth is also coming out of this. So this is very strategic, you know, one shouldn’t read much into just 1/4.
Parikshit Kandpal
Okay. My second question is, we have seen a tremendous effort on business development and we have been hearing every quarter, one or the other announcement. But on the launches, I mean, this year has been. Besides the Thane launch, we have not really seen any major launches. So while largely the year has been driven by sales, only when there is a launch, we see the growth coming in if I compare Y-o-Y numbers. So now given that we have built-up of business development, so now in Q4 and for the next year, how are we planning for the launches?
Vikas Oberoi
So very valid point, a good question. But again, we really want to work on the product, why today people are paying this kind of premium is also because we really work very, very hard on what we want to build. And so until unless something comes to a level where we are excited and bring it to the people, we don’t really launch and you would have seen in all our products so you don’t want to let this entire USP go away but you will be happy to hear that a lot of work has already been done in the BD that you talked about. We — so they are really very geared up.
Now planning fully done and ready. Planning fully done and ready, pedal road, planning done and ready. They have another project now ready, like planned and ready. And so again, in fact, the one that I told you about SRA and ready like we are ready with our plans. So you will see a good — and the best part is these are diverse projects. They are in different locations, so they don’t compete with each other. And that’s exactly what our endeavor was.
We’ve literally spread ourselves well. And so you will see between second-quarter next year and 3rd-quarter next year, you will see all these coming up at one-go. And we’re really planning for the next year to happen. And for this year, like you see, we also have enough ready apartments to sell. We have, we have, we have, we have Thane 2 project. So I will continue to sell. There is really no issue.
Parikshit Kandpal
But with Borivali last quarter, I mean, do you think in Q4 any launch? I mean the last quarter was…
Vikas Oberoi
No, we obviously have one tower left either — and again, we were trying to time it once our mall is ready, once the people see what we have built, the way this entire lifestyle is built, literally when you walk out-of-the apartment, walk-through the mall and straight away go into a you know into the metro station directly without even putting your feet on a — you know on the road, exactly like what you’d see life to be in Singapore or Hong-Kong, I think this project will be on a different trajectory. Most people have been able to probably imagine this and that’s why you see ready apartments have gone through the roof.
And we are just waiting to launch the mall, which we hope to do it in mid-February, early March. And once that — I mean, this is a soft launch, of course, but it will be open to people. So once people start using this entire infra, they’ll realize that life is really different at the Sky City. We are like waiting for that to happen and we’ll quickly launch the last tower that we have. And we have some higher floor inventory in other towers, which we’ll open again.
Parikshit Kandpal
And just last question on this, say this Supreme Court has, I think told to look at the land. So — and you also have taken approval for QIP. So just wanted to pick your brain how do you intend to deploy photon you raise money and will the raise — will be contingent on this deal or any other deal. So how will you time it? How are you looking at that growth capital coming?
Vikas Oberoi
So frankly, we are lucky. We have many avenues and opportunities to raise money, including internal accruals, you know. So frankly, like you said that there is a big thrust on BD. We continue to look at it. Basis the opportunity we will take that call. We obviously, like I said that we do have an enabling resolution, which allows us to do anything that we want in terms of particular value. So again, very opportunity-based, I would say, not the right forum and not the right time to really diverge much. But again, like this is business-as-usual and we will continue to do that.
Parikshit Kandpal
Okay, sir. Thank you, sir and wish you all the best.
Vikas Oberoi
Thank you.
Operator
Thank you. Next question comes from the line of Kunal Lakan with CLSA. Please go-ahead.
Kunal Lakhan
Yeah, hi, good evening. Thanks for taking my question. Good evening. Hi. Vikas, like last-time we were here in the Q2 call, you had mentioned that we had already sold about INR1,050 crores worth of inventory in and we ended-up the quarter with the same number. So what happened in November and December like?
Vikas Oberoi
No. So firstly, I’ll tell you we — obviously we increased our price, I mean, and we and moreover, if you see the way that entire booking was done, a lot of people didn’t understand our strategy or probably we did a bad job in explaining, we had taken interest letter almost three weeks in advance. So we had actually mopped the entire market. This — the result that you’re seeing is not a five-day result. It was a — it was a nice campaign built over 30 days. So — and again, I mean, we launched it during Diwali time. We mocked the entire market up and another 30 45 days was just about consolidating. And when we wanted people who had purchased to feel rewarded and that’s why we increased our price. And that’s how it is. I mean, you know really nothing much to read on that. It’s done really well for us.
Kunal Lakhan
Sure. And then how should we look at like say subsequent phases in Thane like every year you’d be looking at launching similar-size phases or how should we look at basically monetization timeline for Thane?
Vikas Oberoi
So Thane is a signature Garden City project. We have multiple things. Like I said, we’ve already signed the JW Marriot there. We are planning a mall there. We are planning an international school there and we are also like going to be doing multiple phases. So again, like I said that we will create a ecosystem of itself and literally nobody will be able to offer what we are doing within our own bubble literally. So I clearly see that it will become a destination by itself of itself, you know. And we’ll continue to launch phases.
You’ve seen — I mean, you know, again, after 40 years of being in real-estate and more than 12 years in being listed and literally 50 quarters down the line, you’ve seen how we’ve beautifully managed Borivli, how we’ve done our Gorea. We know-how to phase things out and we’ll do it to the best of our ability here also. And I must say that the way infrastructure in Thana coming up, it is really a serious product. You see the linkage it has between and through Moon and through Borivali, Thana, Link, these three will be ready in three to four years. Our projects will also be ready to be delivered. We will be so much more closer to the Western Express highway and then you have the Khana coastal road coming up.
So all-in all, if you see the way things are getting developed, it’s you know it’s very promising for us. And we have a — we have probably the best land parcel one could have got in Khani. And again, our design product speaks for itself. So we are very confident we’ll continue to churn out literally every year and there’ll be no death of demand because like I said, the product will be great and is great rather.
Kunal Lakhan
Sure, sure. Thanks. My second question is on the Versova land again. What are the milestones for conclusion of these deals and what will be the timelines you think?
Vikas Oberoi
You know, we are waiting for the Supreme Court to take that call and everything else then can be spelt out. I don’t think this is a right forum for us to discuss that today. You know. So let it happen. I mean, it’s work-in progress. We’ll absolutely update you. We are very conscious of this fact, you know.
Kunal Lakhan
Sure. And my last question is for Samil. Samil, operating cash-flow this quarter was a little softer. Any particular reason?
Saumil Daru
Yeah. So there was an — so typically, again, whenever there are advances which go out for acquisitions or for advances for towards anything like land, FSI or any of those payments, for me, they all hit operating cash flows of — so for example, what is transaction you know that we mentioned about, there was about a INR90 odd crore deposit that was given. In connection with that normal lifestyle, I mean that NCLT order came through and November was our deadline for concluding there.
So there is about INR300 crores, which has gone into that one. So if you will add this close to INR400 INR450 crores of payments, add that to the operating cash flows and you will see that it is kind of more than in level with what was there in the earlier quarters. So it is just that you know, these payments kind of hit the operating cash-flow and that’s what kind of gives you the number where it is.
Kunal Lakhan
Sure. Understood. Thank you so much and all the best.
Vikas Oberoi
Thank you. Thank you.
Operator
Thank you. Next question comes from the line of Puneet with HSBC. Please go-ahead.
Puneet Gulati
Yeah, thank you so much. So Vikas, I think we’ve been building Gorega or Garden City for almost two decades. Do you have a thought in mind how do you want to build Khanae differently? And in terms of a timing perspective, the 15 plus million square feet of area that you have, how long do you think you’ll take to develop that?
Vikas Oberoi
Well, I can answer your first question easily, probably better and faster. That’s it. Nothing more.
Puneet Gulati
Okay. That’s good. And secondly, if you can also talk a bit about what is the strategy on? That’s been a little soft. Anything you’re doing to accelerate sales there?
Vikas Oberoi
No, so now Enigma, entire occupation income for Eternia also, we are expecting this UC to be with us within the next 30 days. We’re done with it and we obviously finish our rest of the — what you call large project, I mean, if you really see the entire development and we build it at one-shot. So — and then it’s been received well. Again, there also we see resale happening at higher price than what we are selling at.
So again, some of the better view apartments that got sold first are selling at a higher price than what we sell at. So I see it as a huge positive. There’s really no issue. And again, you know, the best building in Malone ready with lock and key, full occupation certificate done and people living there. So really no issue. Again, you know it’s all — we are doing our best. And then it’s — it’s again like where the velocity in that area, which drives all this.
Puneet Gulati
Understood. That’s very helpful. And lastly, if you can also talk a bit about how you’re thinking about Mumbai as a market in terms of pricing growth from current levels and also the competitive intensity on business development.
Vikas Oberoi
Okay. So again, like these are such everyday questions and when my team tells me that they get these questions, they want to know about what is our like drive towards BD or what is our drive towards launches or what is our drive towards, you know, but for us, this is what we actually do day-in and day-out really. And we are opportunistic if we see good land at any point in time, be it a bad market or a good market, we go and buy that. With regards to our sales also, you know, some of us are now beyond probably this entire market pull and push.
Yes, maybe we have a few quarters that probably may go soft or may go strong. But by and large, we have — we have become a strong brand when people decide to buy a house, we are on-top of their mind. So our market shares will either shrunk very little or probably not at all, because whenever there is any correction or any sort of, you know more tension in the market, the flight is always towards quality and that goes for real-estate also. And so I genuinely we are agnostic to how the market will play-out and all that I feel, you know. And in that in the past also.
Puneet Gulati
Yeah. So in your feedback, are you not seeing any signs of pushback on pricing, et-cetera, as yet?
Vikas Oberoi
Zero, can I tell you, absolutely zero. So again, like I said that we’ve increased price in Thane, we’ve increased price in, Borivali, we’ve increased price in by 20% and yet there doesn’t seem to be — see these are — and then we have not increased our price because we want to increase our price because resale is actually happening at those prices. If you see Goregaon or if you see Boravi, if I were to tell you at what price or ready apartment is getting sold at and when you compare to our launch, you see clearly there is that much of headroom one can really you know, pay for the new product.
Like, today the ready apartment is at INR50,000 per square-foot plus on carpet, you know. And in fact, some of them which are like selling at premium was selling at even INR16,000 on. So we are a great deal even today and there is enough headroom for us to grow on price. I think that’s something that people don’t calculate. We do and that’s why we see an opportunity and push our price up. And that’s why there is no resistance also.
Puneet Gulati
Understood. That’s very helpful. Thank you so much and all the best.
Vikas Oberoi
Thank you.
Operator
Thank you. Next question comes from the line of Barma with Antique Stock Broking. Please go ahead.
Biplab Debbarma
Good evening, Mr. Sir, my first question is on your land parcels. So sir, you have lot of land parcels in, Road, Tardio,, Gurugram and Alibab. So sir, is it reasonable to expect the launch of all these projects in the next 12, 18 months?
Vikas Oberoi
Absolutely. In fact, why 12 to 18 months even faster than that.
Biplab Debbarma
Okay, that’s a great news. The second question is on the strong cash-flow visibility that we see. So you have lot of ready inventory in 360 West and Maloon. And also we expect rental income of around 13 bill billion by next year from your malls and commercial offices. Keeping aside this and deal or expected funding, we keep those things aside. But should we anticipate continued business moment — momentum in business development because of surplus cash-flow or will this surplus cash-flow be allocated to the projects acquired so-far and the capex that is coming in your project. So how do you see this surplus cash-flow that we expect in the next few years from this ready inventory and expected rental income?
Vikas Oberoi
Thank you for your deep study about our entire cash-flow. You’re absolutely spot-on. We ourselves know the potential the company has when it looks at these ready assets. We are probably amongst the only real-estate company who’d have this sort of ready inventory where there is really virtually no debt on any of this and cash that and that is straightaway cash-flow for you. Obviously, you know, money is a raw-material for us to go and buy land. We will be diverting this money into buying more land. And this is exactly our business and this is what we want to do.
We want to keep churning the cash that we pull out of our business back into BD, take that land. So it’s a circle that we keep following. I mean, it’s like we literally repeat this on a perpetual basis. And we know that this is huge potential and strength for us. And we are mindful and very focused on working it exactly the way you’ve envisaged. And that’s really we’ve broken this company down to be as simple as you made it sound to be. And that’s exactly our strategy. There’s no rocket finance. It’s just put your head-down and continue to work that way.
Biplab Debbarma
Thank you, sir. And all the best.
Vikas Oberoi
Thank you.
Operator
Thank you,. Thank you. Next question comes from the line of Pritesh Sheth with Axis Capital. Please go-ahead.
Pritesh Sheth
Yeah. Hi,. Hi, Samil. Thanks for the opportunity. So just first on, you know the scale-up in launches that we are expecting from next year onwards. And historically, if I look at last two, three years trend, we have had one big launch in a year and then obviously other sustenance sales takes care of the overall bookings. Now we are talking about four, five launches in a year. So how much is the team ready to do that? And in terms of bandwidth, where do you think most of the bandwidth goes when we are looking at three, four launches? And is it largely a largely the planning which delays our launches or it’s — or it’s more to do with sales and marketing strength that we would need to handle these main launches?
Vikas Oberoi
No, sorry, Pritesh, none of these actually. It’s like really strategically played out. We are — we want to first certain like how we are growing, what we are doing, how our products playing out. Today, you know, as an organization, we are capable of literally doing 10x of what we were doing earlier. And we’ve shown over-time. What people don’t understand is that one of our — our single launch is so big. If you see what we’ve done in Thane, you know like our first phase is actually the size of typical project of any large developer, you know, which is literally our first phase of the both give or take, 35 lakh, 36 lakh square feet of carpet area in our first phase that we have launched, of which we have only sold two towers.
So really, if you come to us, I can show you the entire Garden City, Thaney layout is ready. We could be probably launching 20 towers at one-go, marketing is ready, product is ready. There’s really nothing that’s holding us. We only want to trend cautiously new markets, how we want to play them out and all that. Nothing other than that. So as far as the ability of the company goes, very, very there, enough talent and enough systems in-place and continuing to use, I mean we’re like one of those companies are building ability on AI and doing so many things very differently that the industry has not seen. So for us, our internal motto is that 1,000 people will do work of 10,000 people today by simply adopting technology and AI and so on and so forth. So that part totally with it. We now know-how to do things much faster than what we were doing earlier. So absolutely no issue, none. I mean we have no constraints of any sort, manpower, you know, intend, everything.
Pritesh Sheth
Sure, sure. That’s helpful. And what could be the only risk that you assess right now which could DA these launches? Is it largely then related to regulations and government-led approval delays or that too you are comfortable managing it.
Vikas Oberoi
So Pritesh, firstly, all the land parcels are purchased or all done without clear. There are no — there is no out-of-the-box approval that one requires. Whatever we need is within the framework of law and approvable in nature. And whatever time it takes, you know more, is what it will. So really, I don’t personally see any surprises. Moreover, like I said that we are not the ones who let go of any bad experience not get captured and get something positive out of it.
So whatever we’ve learned in the past 40 years, good or bad, it really stays with us and it helps us do better. So again, like I said, that’s very focused. A lot of people don’t understand Tider Road had a few tenants. So tenants is not something that’s in our control that we can do and things like that. So now everything is cleared there, we are ready to go. You’ll see all these lined-up and launches really soon.
Pritesh Sheth
Sure. And just one last if I can. You know we raised INR1,500 crore in NCDs and we have already invested roughly INR400 crore-plus in a couple of land transactions. INR1,000 crores still sits in the cash fitty. We already had good amount of cash surplus. So just trying to understand, I mean, have we invested some more in this Versova or Sara land that we are talking about and what’s the near-term plan with this — with this cash?
Vikas Oberoi
So I only want to tell you that you will be in for some very pleasant surprises going-forward in terms of land deals, wait for us to announce and you will know where this money is going. So really working a lot and a lot harder on all of that and you genuinely be pleasantly surprised.
Pritesh Sheth
Okay. But we have not deposited this INR1,000 crore as-reported by media in that Sara Land case or we have.
Saumil Daru
Yeah. Ritesh, we will — yeah, we can discuss all of these once the transaction and everything gets done, we will appreciate that these are all matters which are in courts. So it would be difficult to you know kind of discuss that any further.
Vikas Oberoi
Correct.
Pritesh Sheth
Got it. I respect that. Absolutely. Thank you. All the best.
Vikas Oberoi
Supreme Court, I think. Thank you.
Operator
Thank you. Next question comes from the line of Akash Gupta with Nomura. Please go-ahead.
Akash Gupta
Hi, Akash. Hi, hi, sir. Congrats on the good results. Sir, actually, just two quick questions from my side. First is like I wanted to understand how are you looking at the on-the-ground residential demand, both on the luxury segment and in the mass-market segment? And second is that I think there is a case going on between Ireo, AIPL and for the Sector 58 land parcel. I wanted to check, would that impact the launch of the project in second-quarter next financial year?
Vikas Oberoi
So I’ll answer your second question first. No, none of this will affect. Obviously, all this is being taken into account and permissions are coming as we speak on the project. So we are getting ready to launch. Like I said that probably the — either like end of second-quarter or 3rd-quarter next financial year, we should be good to go. Plans are already done and ready what was your first question, sorry?
Akash Gupta
And sir, I just wanted to understand your thoughts on the residential demand, both on the luxury segment and the mass-market segment, how are you looking at that?
Vikas Oberoi
So again, I said I answered this in a different way to a different question, but I feel that we are agnostic to demand as such because see, buying a house is not going out of fashion. It will always be there. There may be high-demand or there’ll be moderate demand. But when you are a good brand and you’ve made a good product, at that time, you always know people gravitate towards quality and we know we’ve built a quality company and people will continue to come to us. And this is something we’ve seen even in previous recessions or slowdowns or whatever one can Call-IT. In fact, we are very bullish that if, God forbid what you are trying to hint happens, we are the best — we are very well-positioned or place to actually take advantage of this situation and not the other way around really.
Akash Gupta
Understood, sir. Thank you so much.
Vikas Oberoi
Thank you.
Operator
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr for closing comments.
Vikas Oberoi
Thank you all for taking time-out for this call. We look-forward to hearing from you on a regular basis. Please feel free-to reach-out to us or our Investor Relations team just in case any of your questions are unanswered. Thank you once again.
Saumil Daru
Thank you.
Operator
Thank you. On behalf of Opera Realty, that concludes this conference. Thank you for joining us. You may now disconnect your lines.