ICICI Securities has reiterated a BUY call on Oberoi Realty, setting a 12-month target price of Rs 1,830, implying an upside of about 21% from the current market price of Rs 1,516. The recommendation follows the company’s Q3FY26 results, which reflected near-term operational softness but preserved the longer-term investment thesis anchored in a strong launch pipeline and premium asset quality.

Executive summary: Temporary slowdown, structural strengths intact

Oberoi Realty’s Q3FY26 performance underscored the cost of delayed launches in a market that rewards steady inventory replenishment. Pre-sales and collections declined sharply, weighed down by the absence of fresh project launches and a high base effect from last year. Yet, the company’s consolidated revenues held up on the back of robust rental income and stable residential realisations in key micro-markets. More importantly, management confidence around a launch-heavy FY27, coupled with ongoing business development discussions in Mumbai, reinforces the view that the current slowdown is cyclical rather than structural. ICICI Securities believes FY27 could mark a meaningful recovery phase, justifying a BUY rating despite near-term volatility.

Q3FY26 results: Pre-sales stumble, profitability resilience

Pre-sales and collections weakened materially. Oberoi Realty reported Q3FY26 pre-sales of Rs 836 crore, a sharp 56% year-on-year and 36% quarter-on-quarter decline, largely due to delays in planned launches. Collections also fell 30% YoY to Rs 975 crore, reflecting lower booking momentum across key projects such as Elysian, Sky City and Three Sixty West.

Revenue stability came from annuity assets. Consolidated revenues rose 6% YoY to Rs 1,493 crore, supported by a 33% YoY jump in rental income to Rs 301 crore, while residential revenue recognition remained broadly flat at Rs 1,107 crore.

Margins held firm despite segmental pressure. Consolidated EBITDA margins stood at 57.4%, flat sequentially, as higher-margin rental and hospitality assets offset the dip in residential margins. Adjusted PAT increased 4% YoY to Rs 646 crore, though it declined sequentially by 15%.

Residential portfolio: Pricing discipline over volume chase

Selective price stability signals confidence. Management chose to hold elevated pricing in Goregaon and Borivali while maintaining stable prices in Thane projects, prioritising margin protection over aggressive volume push.

Inventory remains substantial but well-placed. The company carries nearly Rs 13,000 crore of inventory across seven ongoing residential projects, providing both revenue visibility and launch flexibility once approvals are in place.

Project-wise performance diverged. While projects such as Eternia and Forestville recorded sequential improvement, flagship developments like Three Sixty West saw moderation in booking values due to timing issues rather than demand erosion.

FY27 launch pipeline: The core of the recovery narrative

Launch-heavy calendar expected to offset FY26 slippages. ICICI Securities highlights that Oberoi Realty plans to launch one tower each in Goregaon and Borivali, with 6–8 lakh sq ft per tower and Rs 3,000+ crore GDV potential each.

Multiple projects line up beyond Mumbai suburbs. The near-term pipeline includes two towers in Thane, the Adarsh Nagar redevelopment, the Pedder Road project, and the Sector 58 Gurugram project, which may spill into Q1FY27 pending approvals.

Retail and hospitality expansion adds annuity depth. Sky City Mall is expected to achieve 100% occupancy over the next two quarters, aided by large lease signings, including an Apple store opening slated for early 2026. The company also plans to commence work on the I-Ven mixed-use development and launch a 200+ room Ritz-Carlton hotel.

Commercial and hospitality assets: Silent stabilisers

Malls and offices continue to deliver high margins. Oberoi Mall and the Commerz office portfolio reported occupancy levels in the mid-90% range, with EBITDA margins exceeding 90% in several assets.

Sky City Mall scaling up steadily. Occupancy improved sequentially, and management expects full stabilisation as marquee tenants commence operations.

Hospitality recovery remains gradual but visible. The Westin Mumbai Garden City posted improved average room rates and stable occupancy, supporting consolidated cash flows.

Valuation framework: SOTP supports Rs 1,830 target

Correction already prices in execution delays. The stock has corrected nearly 23% over the past seven months, reflecting market frustration over deferred launches.

Sum-of-the-parts remains compelling. ICICI Securities’ revised SOTP valuation assigns Rs 930 per share to residential NAV, Rs 378 to commercial assets, Rs 94 to hospitality, and adjusts for net debt, arriving at a base NAV of Rs 1,362.

Premium justified by asset quality. A premium of Rs 468 per share is applied to the residential portfolio, resulting in a target price of Rs 1,830.

Key risks investors should track

Launch execution remains the single biggest variable. Further delays in approvals or design changes could push revenue recovery beyond FY27.

MMR demand sensitivity. A slowdown in Mumbai Metropolitan Region housing demand could weigh on pre-sales momentum.

Macro cost pressures. Rising interest rates or construction input costs could pressure margins if not offset by pricing power.

Investment view: Patience likely to be rewarded

Oberoi Realty’s Q3FY26 numbers may appear underwhelming at first glance, but the underlying narrative remains intact. The company’s balance sheet strength, premium positioning, and annuity-heavy asset base provide resilience during launch-light phases. With FY27 shaping up as a decisive year marked by multiple high-value launches and potential business development announcements in Mumbai, ICICI Securities believes the stock offers an attractive risk-reward proposition for long-term investors willing to look beyond near-term noise.