Nomura Raises Oberoi Realty Target to ₹2,090 from ₹1,850, Reiterates 'Buy' Rating on Q1 FY27 Pre-Sales Upgrade
Nomura Lifts Oberoi Realty Target on Upgraded Pre-Sales Outlook
Nomura reiterated its Buy rating with a target price of Rs 2,090, raising its FY27 and FY28 pre-sales estimates by 14 per cent and 17 per cent, respectively. The upgrade follows Oberoi Realty's net profit growth of 29.02 per cent year-on-year to ₹543.51 crore in Q1 FY27, released on 17 July 2026.
Growth Drivers and Estimate Revisions
Nomura expects the company's pre-sales to grow at a compound annual growth rate of around 40 per cent over FY26-28, backed by healthy cash generation, a strong balance sheet, and rising annuity and hotel income. The analyst raised its estimates against a backdrop of robust growth across key financial metrics, driven by strong booking execution, construction momentum, and accelerated revenue recognition across premium residential portfolios.
Revenue from operations increased 31.7 per cent to ₹1,300.89 crore in Q1 FY27, from ₹987.55 crore a year earlier. However, both profit and revenue fell short of Bloomberg analysts' poll estimates, with revenue coming in below the street estimate of ₹1,715.25 crore.
Valuation and Balance Sheet Strength
Despite trading at a 46% premium to NAV, Nomura maintains its Buy rating with a target price of ₹2,090, citing strong growth prospects. The debt profile remained highly conservative and underleveraged, with the debt-to-equity ratio at 0.15, down from 0.19 year-on-year.
Annuity Income and Recurring Revenue
Nomura expects annuity and hotel income to grow at 15–20% CAGR during FY26–FY29, supported by the ramp-up of Sky City Mall and two new hotels expected to commence operations from FY27. Higher recurring income improves earnings stability and reduces dependence on residential sales.
Market Position and Expansion
The Mumbai-based real estate developer reported strong year-on-year growth, driven by healthy revenue growth. The company's project acquisitions over the past three years are now translating into new launches. Earlier in July, the company recorded gross bookings of approximately ₹8,109 crore at Three Sixty North in Gurugram, its first luxury residential development in the National Capital Region.
Outlook and Risks
While the first quarter started on a weaker note, the company expects a much stronger performance in the coming quarters. The primary downside risk remains an adverse DTCP Haryana ruling related to the Gurgaon 360 North project, which could delay approvals or impact project economics.
The company's board declared an interim dividend of ₹2 per equity share, equivalent to 20 per cent of the share's face value, for FY27.