Oberoi Realty Ltd

NSE:OBEROIRLTY

Q4-2025 Earnings Call

[Operator]

Ladies and gentlemen, good day, and welcome to the Oberoi Realty Q4 FY '25 Earnings Conference Call. We have Mr. Oberoi, the Chairman and Managing Director of the company; and Mr. Saumil Daru, Director of Finance of the company, with us for the call.

Please note that this call will be for 30 minutes. [Operator Instructions] And this conference call is being recorded, and the transcript for the same may be put up on the website of the company. After the management discussion, there will be an opportunity for you to ask questions. [Operator Instructions]

Before I hand the conference over to the management, I would like to remind you that certain statements made during the course of this call may not be based on historical information or facts and may be forward-looking statements, including those relating to general business statements, plans, strategy of the company, the future financial condition and growth prospect. The forward-looking statements are based on expectations and projections and may involve a number of risks and uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by such statements.

I now hand over the conference call to Mr. Oberoi, the Chairman and Managing Director of the company. Thank you, and over to you, sir.

[Vikas Oberoi, executive]

Thank you. Good morning, good afternoon, good evening to all of you as for the time zone which you have logged in, and welcome to the conference call of Q4 FY 2025 results and business updates. Thank you all for taking the time out for this call. Before I begin, I would like to share with you some of the quick business updates.

I'm happy to announce that we have recorded our highest ever annual consolidated revenue of INR 5,286 crores and the highest ever annual booking value of over INR 5,281 crores. For Q4 FY 2025, the quarter was driven by steady sustainments of residential sales. We also -- especially the soft launch of Sky City Mall in Borivali, which we received an overwhelming response for both -- from both consumers and our retail partners. Our commercial portfolio, including Commerz III continues to attract marquee tenants, reflecting robust office leasing demand. As in reality entered into a transaction for INR 1,250 crores of infusion by a private equity investor for 21.74% stake.

Currently, we are gearing up for the upcoming Elysian Tower D launch, which happens to be tomorrow. The initial response basis, the EOIs that we've received seems to be extremely robust.

With this, I will now open the floor for questions and answers. And both Saumil and I will be very happy to take your questions. Thank you.

[Operator]

[Operator Instructions] We'll take our first question from the line of Puneet from HSBC.

[Puneet Gulati, analyst]

Best wishes for your upcoming launch. Can you also talk about the other launches that you're planning for the year in terms of Borivali's Tower and other projects, what should one build in as expected timeline for those?

[Vikas Oberoi, executive]

So obviously, Borivali is likely to be launched this year. We are looking at more of the festive season to launch that. The next quarter pretty much is a washout because it's monsoon and we personally don't prefer doing any launches around that quarter. So it will be in Diwali. And so are other projects, I mean, some of these are lined up in the...

[Puneet Gulati, analyst]

Gurugram, Adarsh Nagar if you can talk about it...

[Vikas Oberoi, executive]

Correct. They're all lined up in the second half of this year. And there are many projects, we'll sequence them out. We have quite a few redevelopment projects in the city, which we will line up and they'll all -- yes.

[Puneet Gulati, analyst]

Okay. And on the Sky City soft launch, what is the trading occupancy now? And how do you expect it to ramp up in FY '26?

[Vikas Oberoi, executive]

So firstly, it's absolutely a soft launch. We also wanted to get used to handling people, the traffic, the transportation, how the cars get in, cars get out, security, all of that too. So we've not done a single ad, not a single promotion. We just wanted stores to start opening. Virtually 4 or 5 stores are opening pretty much every day, like that, we have close to 300, 400 to go. And I feel we'll have a decent critical mass by June. And that's when we'll really start -- that's when we really start monitoring all this.

But the social media impact has been tremendous. I mean, unheard of, and the demand from retailers has like shot up like how. I mean -- like -- now they are running after us for them to close these deals. So it's like really been a revelation and we ourselves are surprised with the potential that location has.

[Puneet Gulati, analyst]

So it's not fully leased. I was under the assumption it would be fully leased. There is still some to be leased?

[Vikas Oberoi, executive]

No, no, no very substantially leased. And we obviously, like we want our numbers. We want to get a particular rental that we were expecting. And we are getting that much and more now. So our strategy was to show the product in its glory. And now once what people see, they really are very motivated.

[Puneet Gulati, analyst]

So can you talk about expected rentals, both in place and what are you getting now?

[Vikas Oberoi, executive]

So different sizes, different floors, different -- I mean we have rentals up to INR 1,000 a square foot on carpet area. So I mean, like between INR 400 and INR 1,000 something like that. So it all depends on who is coming in. We've got a very nice gold soup kind of a special area where we have got all jewelers there. We've got very high-end watches in one segment. So very interesting. I mean, this is literally one of the best malls, I would say in the country, the way it's designed and the feedback that we get, it's really, really nice. And the deals signed at INR 1,000 carpet, these are deals signed.

[Operator]

We'll take our next question from the line of Parikshit Kandpal from HDFC Securities.

[Parikshit Kandpal, analyst]

Congratulations on a decent quarter. My first question is on the luxury demand. So a large part of our portfolio resides in the luxury segment. So what kind of footfalls I mean, you're seeing? Have you seen any slowdown in the Q4 quarter? And is it continuing in this quarter? So if you can give some sense on the color on the demand and footfall and conversion, especially on 360 West and other premium projects?

[Vikas Oberoi, executive]

So I'll be very well positioned to answer this question tomorrow because Goregaon and this is luxury only goes out for sale, and looking at the EOI's it just doesn't look like. I mean people -- I'm embarrassed to say that there's a queue of people waiting to book today for the launch tomorrow. I mean we had people actually starting to line up today in the morning. And we had to tell them that it's not today, it's tomorrow. And they're saying, yes, we know it's tomorrow, but we still want to wait. So something like that.

Having said that, you would have seen our results last quarter, we've sold like apartments for INR 200-plus crores in 360 West. So again, luxury is agnostic to the economy. I feel people who have the money, have the money, and who want to live a particular lifestyle don't care for a single quarter going up or down as such. So I don't see any slowdown at all. I mean, at least we don't even feel that in the luxury segment.

[Parikshit Kandpal, analyst]

Okay. Because, Vikas, last time, you mentioned that you look to sell out 360 in 2 years. So this year, we did about INR 1,800 crores, and we still have -- at the current rate approximately INR 5,000 crores of unsold inventory. So now what timeframe you're looking to run this down?

[Vikas Oberoi, executive]

I have this joke, I tell everybody that when I took inventory of 360 West, we valued at an X price. And we have sold 50% of that and still that remains to be X. So it's not a bad position to be in, right?

[Parikshit Kandpal, analyst]

Right.

[Vikas Oberoi, executive]

Yes. So that's it.

[Parikshit Kandpal, analyst]

And just...

[Vikas Oberoi, executive]

Yes, it's today at INR 150,000 a square foot on CapEx and you know our acquisition or whatever that cost.

[Parikshit Kandpal, analyst]

Got it. So Vikas on the launches, if you -- I mean you just really touched on that, that you're planning for H2 launches. So if you can also quantify which ones will come in H2. One, we know that you opened this tower now leasing. So beyond the second quarter, nothing is happening. So third and fourth, if you put some numbers which are the probable launches you're looking at, if you can specify, it would be helpful.

[Vikas Oberoi, executive]

So -- like the easiest to predict is our Borivali the next tower. Again, these are large areas. And so that's one. And then we'll have -- we have 3 projects in the city. So we line up that as well. And then we have Gurgaon happening. So we will do that also. So a lot -- I mean very well laid out and things that we know we can easily achieve.

[Parikshit Kandpal, analyst]

But Adarsh Nagar will happen this year or it's most probably moving into next year. So only one project in South...

[Vikas Oberoi, executive]

It should happen this year.

[Parikshit Kandpal, analyst]

Okay. And just the last question on this land in Thane, which is the one which is opposite to the Jardin one. So anything we'll open up this year and the other part of the land parcel, which is a bigger land parcel of 60 acres plus? Or is it planned for...

[Vikas Oberoi, executive]

In the bigger land parcel, we'll start work on the mall. We'll start work on the hotel, and we'll start work on the school. So like what we did with Goregaon, we are going to build social infrastructure. And there, again, we've launched -- we've only launched 2 towers. We've got 3 more towers to launch. And we are looking at maybe some different configuration in all different size. So that itself is there for us to do. And like I said, that on the other larger side, we will do the mall, the hotel and the school to begin with.

[Parikshit Kandpal, analyst]

That is at least 2 years away then. I mean the larger land parcel for launch, and before you run down these 3 towers and the...

[Vikas Oberoi, executive]

Not really, I mean, it all depends on demand and flow and we could probably do next year. It may not be 2 years. This year, we will do these. We will launch rather one more tower basis, the demand and basis how things go. We launch one more tower.

[Operator]

We'll take our next question from the line of Rahul Jain from Elara Capital.

[Rahul Jain, analyst]

So a couple of questions. First one, sir, on the sales strategy. I mean you closed the year at INR 5, 300 crores with a solid growth of nearly plus 30%. But I think given your product offerings and your brand positioning, you would have clearly done much more than that. So how should we look at your sales strategy going forward given substantial number of pipeline of projects coming through. So is it a conscious decision to stop at 25%, 30% for next year?

[Vikas Oberoi, executive]

See, firstly, let me tell you. I don't want to comment on other people, but our sales are backed by a lot of money that we ask for. I could very easily take 5%, 10% and give them literally like an option to buy and then pay me once I am -- at this level or one time at that level, that kind of sales, I personally don't even consider at our sales. And a little bit here and there, there are cancellations and all that happen.

So for us, we are very clear. We are not averse to volumes. Obviously, I'd love to go to INR 10,000 crores tomorrow. But I want them to be backed by the money that we ask or demand. So those things are very important for us, and profitability is very important for us. And this is how we want to grow. And now our focus is on building rent-yielding assets. Our focus is on really on profitability and sustainability. We don't want to be like a fly-by-night company come in, just try to capture the market. And then today, like we are in an inflatory economy, so many uncertainties. So put all that together, I feel the way we cost our business versus the risk involved. I think we are doing a good job.

[Rahul Jain, analyst]

Got it, sir. And second one, I think you have closed -- I mean you have built a substantial pipeline over the last 3 years in terms of BD. Are you seeing that kind of opportunities lately as well in terms of business development opportunities. And if you can just give us some flavor on in terms of whether this would be more diversified. I mean, you built a diversified pipeline, but are you seeing a new entry into new micro markets or markets for that matter?

[Vikas Oberoi, executive]

So frankly, we are always -- so we treat business development like a separate vertical in our office. And they are always and constantly looking at opportunities. We are -- we don't -- we don't set a target and follow, we go and chase every deal. And whatever makes sense we'll close it. Really, we are so well capitalized that we can actually do a lot more. But then the idea is to make sure that we do deals that are profitable in nature. We just don't want to just go and buy for the heck of buying. And that's why we've not been carried away by the market or whatever. We are very, very focused, very conscious of what we buy. And yes, that's what we exactly want to continue to do.

As far as micro markets, like I said, that we've put our foot in Gurgaon, we want to see how this plays out. We want to first start development there, see how the market response is. We are in this for the next 100 years. So I know we have enough time and we want to do it the right way and we want to understand, learn the market, whatever, we are not in any big hurry. We are looking at opportunities. And unless we get the right opportunity, we won't jump in.

[Operator]

[Operator Instructions] The next question is from the line of Abhinav Sinha from Jefferies India.

[Abhinav Sinha, analyst]

A couple of questions. So one, the deal that we had on the I-Ven Oasis project in Worli. I just want to hear your thoughts on how we are thinking about the product timelines and also why will you seek out a PE while our own cash flows are pretty strong?

[Vikas Oberoi, executive]

Okay. So basically, we want to build a high-end shopping mall, an office building and a hotel on top, a very small hotel on top. This is what we are going to build. Hopefully, we should build this within the next 3, 3.5 years, and we want to build an iconic marquee building. The reason why we took private equity is we now have a third party between me and ORL because I'm also a small stakeholder in the company. I didn't want it to -- I mean -- so that sets the arm's length rule also for all of us. We are 3 partners, everybody puts in proportionately and all of that. So that's really what I wanted to do. And again, Alpha Wave is a great partner. Very happy to associate with them and, yes.

[Abhinav Sinha, analyst]

Right. And will you look to exit in your own personal capacity later or not thought about that yet?

[Vikas Oberoi, executive]

No, no, not at all. Not at all. Frankly, you are so right. Neither my company nor I need that kind of money. So we are okay to continue for now.

[Abhinav Sinha, analyst]

Right. Sir, second question on pricing. So we had good price jumps taken last quarter in several of our projects. How are we looking at pricing now in the next, let's say, 12-odd months? And how are you pricing Elysian's D Tower also?

[Vikas Oberoi, executive]

So you will know that tomorrow. It's very attractively priced, and it's a good product. Both C and D are identical in terms of -- they're like 1 or 2 floors behind each other. I don't know how many of you know, but we are on probably the 27th level at Tower D. So this is one project where we are literally 1, 1.5 years from topping up and yet this thing. So it's great. I mean this is where we are.

[Abhinav Sinha, analyst]

But pricing otherwise?

[Vikas Oberoi, executive]

Again, we are -- we literally manage our portfolio like how a revenue manager sits in his hotel and tries to sell his rooms. So we want to be optimum and we want to be sensitive to what the markets are, what the replacement costs are and so on and so forth, and that's how we price it. Our own input cost, all these things also matter.

[Abhinav Sinha, analyst]

Right. Sir, last question on the Gurgaon [indiscernible]. So -- are there any legal or approval challenges there that you foresee, say, in the next 6 months before we can launch the product. And what is the product you're thinking about also at this point?

[Vikas Oberoi, executive]

So we are looking at high-end luxury and it's very similar to what we are doing, maybe a smaller version of 360. It will start with INR 5,000 or so and will go up to INR 7,500, INR 8,000. And yes. So literally, that sort of product. It's high end, high quality and it's very well designed, really like it.

[Abhinav Sinha, analyst]

Right. And approval-wise?

[Vikas Oberoi, executive]

Approval wise, we are -- we constantly keep getting approvals. So there is really no challenge. We've got a few approvals in the past, maybe a few weeks ago, and the rest of them are also in place. So we are on a good wicket there.

[Abhinav Sinha, analyst]

Okay. So building plans are filed already?

[Vikas Oberoi, executive]

Yes. They are being filed as we speak. We're taking our TOD. We are doing all of that. TOD in principle approval is in place. We got that approval. Now we are getting the final approval, so on and so forth.

[Operator]

We'll take our next question from the line of Murtuza Arsiwalla from Kotak Securities.

[Murtuza Arsiwalla, analyst]

Just to check, would you like to put out a number in terms of a sales target that you would be looking for or ultimately building blocks of the various projects, how much would you expect to put to launch and out of some of the larger projects Adarsh Nagar, Gurgaon et cetera. So any building blocks for the sales number for next year that you would have a target that you would like to share?

[Vikas Oberoi, executive]

Murtuza, much that I would love to. I somehow don't feel comfortable because whenever a promoter says something, the markets take it really seriously. And there are many a slip between the lip and the sip. So I don't want to put a number. You guys are very good at all that, and you all are very close to the numbers that end up -- as we end up achieving. So I leave that guesswork to you. I don't want to do that. I'll work hard, and I'll try and maximize whatever I can.

[Murtuza Arsiwalla, analyst]

Sure. And Saumil, just a question for you on the rental business, just something that I happen to glance on. When you look at the operating margin, this is on Slide 8 of your presentation, it's 97% for a large part of last year versus 90%-ish in this year? Anything to read on that numbers just ramping or how should one look at that number?

[Saumil Daru, executive]

This is on the rental side, right, on the office side?

[Murtuza Arsiwalla, analyst]

Yes, on the rental side. On the rental side, that's right.

[Saumil Daru, executive]

We just had the launch of Commerz III. So basically whatever is the -- what you can say, the CAM on the unleased area that comes through as a hit. So...

[Murtuza Arsiwalla, analyst]

That's acting as a drag. So once the occupancy stabilizes, we should look at 95% plus once again?

[Saumil Daru, executive]

Correct. Correct.

[Operator]

The next question is from the line of Kunal Lakhan from CLSA.

[Kunal Lakhan, analyst]

Vikas, any color on the Alibaug launch?

[Vikas Oberoi, executive]

Well, designing in progress. Thank you for asking. I thought it's a small project. People don't remember. But yes, yes, having fun designing it, and first cut is out, but still work in progress. And yes, waiting for the right design to happen and then we'll quickly get after it.

[Kunal Lakhan, analyst]

Sure. And this is more like an FY '27 launch?

[Vikas Oberoi, executive]

It could be end of this year. A lot of work is happening in multiple ends and you all will be surprised that we are finally working on many ends. So yes, we would try to do it in maybe the second half of this year also. But here, we want to first do the sample villa. We want to do a restaurant. This is a Ritz-Carlton hotel and villas. So we want to do a restaurant managed by Ritz and then do a show and then call people and all that, give them a complete feel and flavor of what they will be buying into.

[Kunal Lakhan, analyst]

Sure, sure. Understood. My second question was on -- in terms of Thane, right? I mean, we have seen the traction in Q4. How should we look at like you bringing in incremental inventory? I understand the second land parcel you'll launch maybe a few years out once you have the school, the mall and the hotel ready but -- or rather up and running. But in terms of timelines, right, how do you -- how can -- how should one like a model in terms of like the inventory that you'll bring to the market year after year?

[Vikas Oberoi, executive]

So frankly, we were very pleasantly surprised with the response we got from Jardin, and that was a huge positive. Work is happening at great speed. We now put in this social infrastructure in place. The entire, I would say, the infrastructure of Thane is like really getting transformed with the way the metro and all of that is working. Roads have always been immaculate in Thane. So given all that, I feel Thane looks very promising. We are there for the long run. There's no doubt about that.

You've seen how we have made a location out of every project that we've put, whether it's a 25-acre or 100 acre. So we're really good at it. And more time we get on any location, we can really transform the location and transform the pricing. So internally, we joke that we ideally would love to take Thane the Goregaon way. So imagine the growth that Goregaon saw in terms of pricing and profit, we would love to take Thane that way. And I may not be out of place to say that we genuinely see potential. With the linkage that Thane now has from Borivali and Goregaon, it will really transform. You'll be really surprised to see all of that. The infrastructure, Thane, it's transformational. And we are -- we feel our beds are in the right place.

[Kunal Lakhan, analyst]

Sure, sure. And my second question was on, you had taken an approval for the equity raise of INR 6,000 crores. I mean I understand you take enabling resolution every year, but going by what your peers have been doing in terms of raising equity in buying land. Would you be -- this time around, you'd be seriously considering the raise of equity or it'll be like how it's been in the previous year?

[Vikas Oberoi, executive]

Frankly, very opportunity-driven. We are always open. I mean whenever we feel we need the money, we'll be a right mix of debt and equity, and we will use every opportunity to take advantage of the enabling resolution we've taken.

[Operator]

Next question is from the line of Praveen Choudhary from Morgan Stanley.

[Praveen Choudhary, analyst]

Most of the questions that are actually asked before my turn came. So I'm just going to add a nuanced question, if it's okay with you. One was the QIP outlook where you were thinking of a lot of land acquisitions? Or can you talk a little bit about your outlook towards that? I can see that you're doing a lot of project at the same time, development, et cetera, which is extremely good and launches in the next one year is very good. But in terms of backfilling that business development, the strategy, that will be great.

And the second question, if I may, is on 360 West. Every quarter, we are getting 2, 3 at a very good price. So it's extremely helpful. Is the demand enough to make it going towards 4, 5 a quarter, 6, 7 a quarter. And I know that you can't predict it, but I'm just wondering what are you seeing from a demand perspective?

[Vikas Oberoi, executive]

Okay. So I'll take your second question first. So the good thing about 360 West is that today, it's become a community, it's no more just a fancy good, well-designed, well-executed project. Today, you have people living in there. And that's the game changer I feel. Really people don't understand that. But I clearly see the power of that project is not what we built, okay? It was the initial attraction but today, people want to go where people have already gone. So it's become a cult product by itself. And that people have taken it. So we should really be thankful to all the people who live there. And then most of the people want to be there because these other people live there. So a very powerful tool for us.

And that gives me the confidence that the numbers will continue to increase and we will obviously be done with our sales. And then we will also benefit because we have another project in the close vicinity of this project. Our endeavor is to take all the learnings of this project and make that a 2.0 version of 360 West. So we bring something new. We bring things that are done well, all our learnings and introduce that project. So as far as demand for luxury there is super appetite. Suddenly, people are consuming more square feet per person than what people did earlier.

I mean, it's heartening to see very large bathrooms, boardroom spaces, bedrooms. So per person consumption per square foot has gone up big time. So that's a great thing for us. And like I said, that given the community that has gotten into that building, it's a bigger traction.

On the land acquisition, we continue to be very hungry, and we are looking at opportunity where be required to put in big money, we would love to leverage our strong balance sheet. Our own promoter holding is high, so one can really bring in money into the company and into the QIP and really going for large acquisitions. And I think that opportunity could be this year. So we continue to be on top of this as well.

[Praveen Choudhary, analyst]

Very, very helpful color. If I could just follow up with one more question, which is a bit more bigger picture. We saw some sentiment changing around early part of this year as macro was slightly weaker than today. But we are not out of woods globally with U.S., China, U.S., India, all the tariff situations. What's your general view? It's not a property question. It's just a general India situation and macro situation because we are also intertwined.

[Vikas Oberoi, executive]

So again, I feel that India is well placed. It's not just me. In fact, everybody in the world says that India has got only to gain from this. And we are led by such enabled Prime Minister who is really playing his cards well and our positioning in the world has only continued to improve. So I feel that India will net-net be a beneficiary to whatever happens. And if you really see the amount of export we do, if you really see the dependency India has on other countries, barring oil is very little. We had an inward economy when -- and we -- I think we very smartly outplayed everybody whether -- we really played that well.

So I don't see any strong headwinds when it comes to India. Yes, the world is very intertwined and things happening in the U.S. or China will matter a little, but they won't be destabilizing India. So in the long run, I'd say, in fact, even in the medium, long run, I see India go very, very strong. And this is a time for us to all really the manufacturing industry needs to manufacture. The service industry needs to be on top of its game. And we, as a real estate company, are so locally driven that we will benefit out of all these other economies growing well within the country.

[Operator]

Ladies and gentlemen, we'll take that as a last question for today. I would now like to hand over the conference call over to Mr. Oberoi for closing comments. Over to you, sir.

[Vikas Oberoi, executive]

Thank you all for taking time out for this call. We look forward to hearing from you on an ongoing basis. Please feel free to reach out to me or our Investor Relationship team or Saumil, and for any questions that you have. Thank you again.

[Operator]

On behalf of Oberoi Realty, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.