On Tuesday, Jefferies maintained a Hold rating on Oberoi Realty Ltd (OBER:IN) stock but increased the shares target to INR1,600 from INR1,548.
This revision follows a notable uptick in sales at the company's Worli project, which reached a seven-quarter high, significantly contributing to the company's pre-sales and profit and loss performance.
The first quarter also marked the commencement of lease rentals at the Commerz 3 office property. This development is seen as the beginning of a significant increase in lease rental income for Oberoi Realty.
The analyst pointed out that the majority of Oberoi Realty's project pipeline by value consists of yet-to-be-launched projects. The success of these upcoming launches is anticipated to be crucial for any further revaluation of the company's stock.
Despite the positive sales momentum and the start of lease rentals, the analyst noted that the stock is currently trading at more than a 15% premium to its net asset value (NAV). Based on this valuation, the firm believes that the potential for further upside in the stock price is limited, which justifies the decision to maintain the Hold status.
Investors and market watchers will likely keep an eye on Oberoi Realty's future project launches to gauge the company's ability to sustain its growth trajectory and potentially justify a rerating of the stock. The updated price target reflects the analyst's current view on the stock's valuation in light of recent developments.
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