Oberoi Realty Q4 FY26 earnings call

Oberoi Realty concluded FY26 with strong momentum across all operational parameters. The company announced significant business development activities, securing close to 4 million square feet of development potential in diverse MMR locations. This includes 11 acres in Bandra East and approximately 2 million square feet in Aram Nagar - Versova. Additionally, agreements were made for redevelopment projects in South Bombay, and the acquisition of Horizon Hotel Private Limited was finalized with possession received on May 7, 2026.

The company outlined an extensive launch pipeline for FY27, demonstrating an aggressive growth strategy. Q1 FY27 is slated for launches including Three Sixty North, a small development on Carter Road (Oceanic), Malabar Hill (Fairview), and Tower D of Forestville. Q2 FY27 will see the launch of Jardin Tower A and Ralliwolf in Mulund. Further launches in Q2/Q3 FY27 include Adarsh Nagar, a commercial building (Enigma) potentially for strata sale, and Aurelius on Pedder Road. The RLDA project and a Borivali land parcel (SRA) are targeted for Q4 FY27 or Q1 FY28, with the Tardeo free sale portion expected in Q3 or Q4 FY27.

Oberoi Realty is strategically managing its diverse project portfolio to avoid cannibalization, particularly among its luxury offerings. For instance, projects like Tardeo are positioned with a ticket size of Rs. 12.5-15 crores, while Adarsh Nagar targets the Rs. 50-60 crores segment. For the RLDA commercial project, the company is leaning towards a strata sale model over leasing, citing strong market demand for outright commercial purchases and better cash flow generation, with a potential 50-50 or 60-40 sale-to-held-back mix.

Management acknowledged that construction costs, including energy, aluminum, glass, and labor, are rising and posing a challenge across the industry. However, they stated that an overall cost increase of 2-3% is currently being absorbed by built-in contingencies within project budgets. While these contingencies are being consumed, management indicated that these cost increases are not yet impacting the bottom line, and they have repriced some projects, like Tower G, to factor in these higher costs.

Existing operational assets are performing robustly. Elysian Goregaon has seen strong booking momentum for its higher floor inventory. Sky City Mall achieved an occupancy of over 72% within its first year of operation. Commerz III continues to scale strongly, reaching an impressive 98% occupancy. For the Borivali Mall, management expects to achieve 100% occupancy by March 31, 2027, building on its current 72% occupancy.