Oberoi Realty Share Price Hits Life High As Axis Initiates 'Buy', Sees 20% Upside

Oberoi Realty Ltd.'s share price rose to snap a two-day fall and jumped to hit its lifetime high on Monday, after Axis Securities Ltd. initiated coverage on the stock with a 'buy' rating and set a target price of Rs 2,560, implying an upside of more than 20%.

"Oberoi Realty is a leading player in Mumbai, specialising in developments across residential, retail, hospitality, and social infrastructure segments," the brokerage said. "It is one of the strongest brands in the Mumbai Metropolitan Region."

The brokerage also likes the company's robust annuity scale-up, entry into new key markets, and low leverage with strong cashflows. Oberoi has a substantial leasing portfolio in marquee locations, with occupancy levels exceeding 90%, it said, adding that the Ebitda margins for its current projects are consistently above 90%.

In addition, Axis Securities noted that by fiscal 2027, bookings are projected to exceed Rs 9,000 crore, driven by launches in Thane, South Mumbai, and Delhi NCR. "Furthermore, ongoing projects are expected to contribute to these bookings through upcoming new phase launches," it said.

Not just this, with a net debt-to-equity ratio of 0.02, the company is well-positioned to raise additional funds if required. "Oberoi Realty has consistently maintained a net debt-to-equity ratio of 0.4, reflecting its strong financial discipline and resilience during challenging market cycles. Its annuity cash flows are also set to grow, further contributing to its liquidity," it said.

The company's geographic concentration, regulatory changes, property litigation, and product variation could be some downside risks, the brokerage said.

Share price of Oberoi Realty rose as much as 4.8%, the highest level, before paring some gains to trade 4.7% higher at Rs 2,219 apiece, as of 12:08 p.m. This compares to a 0.6% decline in the NSE Nifty 50.

The stock has risen 53.5% on a year-to-date basis. Total traded volume so far in the day stood at 0.68 times its 30-day average. The relative strength index was at 70, indicating that the stock may be overbought.

Of the 23 analysts tracking the company, 11 maintain a 'buy' rating, 12 recommend a 'hold' and four suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies a downside of 7.5%.