Oberoi Realty, JK Cement, Can Fin Homes, Route Mobile Q1 Results Review: HDFC Securities

HDFC Securities Institutional Equities

Oberoi Realty - Robust presales fueled by 360 West gaining traction

Oberoi Realty Ltd. registered presales of Rs 10.6 billion (+124%/-40% YoY/QoQ); it was largely backed by sales from 360 West contributing more than 40% of presales followed by Elysian and Sky City.

360W saw a good amount of traction in Q1 FY25 as six units were sold (versus 3units in the previous quarter totaling Rs 4.8 billion marking a 118% QoQ growth), we believe that Oberoi Realty is likely to be able to sell its inventory over the next 24-30 months.

The Pokhran project is set to launch in Q3 FY25 during the festive season, with approvals and a ready-show apartment in place. Additionally, Oberoi Realty is prepared to launch the final phases of its Borivali and Goregaon projects during the same festive period.

Commerz 3 has seen continued interest, with over 51% of the area leased to Morgan Stanley and as of June-24, 70% of the space has been leased out, and Oberoi Realty aims for nearly 100% occupancy by the end of this fiscal year.

Borivali Mall is expected to start its operation by Oct 2024, with a leasing occupancy of >80%. For the Worli Glaxo land, Oberoi Realty has finalised plans to develop a mixed-use project (commercial and retail combined) spanning 1.8 msf of carpet area, with 1 msf allocated for office space, approximately 0.7 msf for a mall, and 0.1 msf for a boutique hotel.

Regarding recent business developments in Tardeo, Gurgaon, and Adarsh Nagar, Oberoi Realty plans to launch these projects by the end of this fiscal year or in Q1 FY26.

Given the expected robust cash flows from ready-to-move-in inventory in 360W and new launches expected in FY25 along with new business development, we remain constructive on Oberoi Realty and maintain Buy, with an NAV-based target price to Rs 1,944/share.

JK Cement - Weak demand and pricing moderate profitability

We maintain our Reduce rating on JK Cement Ltd., with an unchanged target price of Rs 4,235/share (13 times Sep-26E consolidated Ebitda), owing to its expensive valuation. In Q1 FY25, JK Cement’s consolidated volume growth slowed to 6% YoY on weak demand.

Blended unit Ebitda declined Rs 70/million tonne QoQ to Rs 1001/mt on weak pricing and op-lev loss. The margin contraction was moderated by lower fuel prices and a rising share of low-cost green power.

We estimate JK Cement’s grey cement profitability will continue to benefit from its healthy ramp-up of expanded capacity, accelerated expansion (targeting 30 mn mt grey cement capacity by Q3 FY26), cool-off in fuel cost, increasing share of low-cost green power, and freight cost optimisation.

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