Oberoi Realty shares surge 5% after Nomura expects the stock to touch ₹2,500

Shares of Oberoi Realty Ltd. are trading with gains of over 5% in Wednesday's trading session after global brokerage firm Nomura initiated coverage on the stock with a 'Buy' recommendation and a price target of ₹2,500.

Nomura's price target implied a potential upside of 22% from Tuesday's closing levels.

The brokerage cited solid pre-sales and cash generation as key drivers, and said the company is poised for aggressive business development.

Nomura expects pre-sales to witness a 40% CAGR between FY24 and FY27, with an embedded EBITDA margin exceeding 50%.

Combined hotel and annuity revenue is expected to record a 35% CAGR during the same period.

Operating cash flow is anticipated to remain at ₹3,000–4,000 crore per year until FY27, excluding investments in new business development and annuity assets.

Earlier on Tuesday, UBS said that it has also initiated coverage on Oberoi Realty with a 'Neutral' rating and a target price of ₹2,230 per share.

Besides, UBS has initiated coverage on two more real estate stocks like DLF and Prestige Estates Projects as well.

While stocks have rallied significantly over the past year, UBS believes tailwinds will drive further earnings growth and trigger a re-rating in the sector.

While UBS does not rule out near-term softness due to a broader macroeconomic slowdown, it said that any dips would be viewed as buying opportunities.

Shares of Oberoi Realty Ltd. are currently trading 4.16% higher at ₹2,146. The stock has jumped as much as 50% so far in 2024.

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