Brokerage house Motilal Oswal has put a ‘Buy’ rating on Oberoi Realty, citing smart entry point for medium-term investors after the stock’s 25 percent drop.
The company’s long stalled project—Esquire (Goregaon)—has received IOD (Intimation of Disapproval), which according to Motilal Oswal, will act as a trigger for the stock. “The construction work should resume by July 2013, reviving sales velocity and customer collections,” the broking firm said in its report dated June 18.
The company’s value unlocking potential is intact (albeit delayed) and will be played out as the long pending approvals are received and the Mumbai market recovers,” it adds.
However, it has revised its price target lower by 10 percent to Rs 290. “We cut our net asset value (NAV) estimate by 10 percent to Rs 290 and our earnings per share estimates for FY14/15 by 6-7 percent to factor in delay in launch of Garden City Phase III than earlier expectations and muted outlook for commercial leasing,” it added.
Shares of Oberoi Realty closed at Rs 210.5, down Rs 2.9 or 1.4 percent on Wednesday.