Motilal Oswal Issues 'Neutral' Rating on Oberoi Realty with ₹1,850 Target; Projects 16% Pre-Sales CAGR for FY26–28E

Motilal Oswal Takes Neutral Stand on Oberoi Realty Amid Scale-Up Phase

Motilal Oswal Financial Services issued a Neutral rating on Oberoi Realty on July 2, 2026, with a target price of ₹1,850. The rating reflects a measured stance on a developer entering a significant growth phase driven by geographic diversification and an expanded project pipeline.

Pre-Sales Growth Acceleration Projected

Oberoi Realty has added multiple new residential projects to its portfolio in NCR and various micro-markets of MMR over the last 2-3 years, positioning it for a diversified scale-up, with the ability to launch multiple projects simultaneously leading to a pre-sales CAGR of 16% in FY26-28E. This represents a material acceleration from prior-year performance. Between FY16 and FY26, Oberoi Realty achieved a slower pre-sales CAGR of approximately 9%, constrained by selective business development and dependence on limited micro-markets.

The launch pipeline for the next two years includes projects in NCR, Carter Road, Malabar Hill, Worli, Peddar Road, and new phases in ongoing projects. Motilal Oswal expects a 16% pre-sales CAGR to ₹73 billion over FY26-28.

NCR Entry and Pipeline Expansion

Oberoi Realty recently unveiled its first phase of the premium housing project Three Sixty North, located in Sector 58 on Golf Course Extension Road in Gurugram, marking its first residential development outside the Mumbai Metropolitan Region. The project, spread over 14.8 acres, will be developed in two phases and comprise 832 apartments across six towers.

The company has notably ramped up its annuity portfolio by adding two assets, increasing gross leasable area by 3x to 6.7 million square feet in the past two years. Motilal Oswal expects a revenue CAGR of 56% in the hospitality portfolio to ₹4.8 billion over FY26-28, aided by the operationalization of two new assets in the next two years.

Balance Sheet Resilience Underpins Growth

Oberoi Realty has maintained very low levels of leverage, with its net debt-to-equity largely under 0.3x across housing cycles, making it one of the strongest balance sheet companies in the real estate sector, with continued prudent approach and focus on balance sheet strength expected to keep it stable.

Despite the robust scale-up, Motilal Oswal expects the balance sheet to remain sturdy, with net cash at ₹1.1 billion in FY27 and ₹2.0 billion in FY28. The brokerage expects 18% collections CAGR during FY26-28E, and given strong cash flow generation during that period, it expects net cash of ₹1.1 billion in FY27 and ₹2.0 billion in FY28E, despite planned capex.

Valuation Premium Constrains Rating

Motilal Oswal notes that Oberoi Realty continues to trade at a premium to its residential NAV. Despite projecting robust growth, the brokerage reiterates its Neutral rating with a Sum-of-the-Parts-based target price of ₹1,850, stating it awaits a better entry point.

The firm values the residential business at a 22% premium to its NAV, annuity assets at a 7.5-8.0% cap rate, and the hospitality portfolio at 18x EV/EBITDA on FY28E.

Developer Context: Four Decades of Mumbai Presence

Oberoi Realty has been an insignia of trust, transparency, cutting-edge technology and differentiated service in the real estate sector in Mumbai for over four decades. The company has delivered 51 projects spanning 17.3 million square feet over the past four decades, while another 34 million square feet is currently under development.

In FY26, Oberoi Realty's sales bookings rose 4 per cent to ₹5,447 crore from ₹5,281 crore in FY25. The company achieved a consolidated annual revenue of ₹6,304.27 crore, driven by steady residential sales and improved leasing activity, with strong demand in the premium real estate segment and successful operations in its retail portfolio positioning it for further expansion.

Analyst Consensus and Market View

Analysts at Motilal Oswal have turned bullish on the real estate sector, with the brokerage naming Lodha Developers as its preferred pick among large players and also liking DLF. Within this context, Motilal Oswal remains positive on Godrej Properties, has picked Aditya Birla Real Estate as its preferred SMID play, while noting that Oberoi Realty continues to trade at a premium to its residential NAV, with the brokerage maintaining a Neutral rating.

The Neutral rating reflects a view that while Oberoi Realty's growth trajectory and portfolio diversification are genuine positives, the current valuation already captures much of the medium-term upside.