Oberoi Realty (OBEREA) 398

Result Update Rating matrix Rating : Hold Target : 385 Target Period : 12 months Potential Upside : -3% What s Changed? Target Changed from 333 to 385 EPS FY18E Changed from 26.3 to 25.9 EPS FY18E Introduced at 27.4 Rating Unchanged Quarterly Performance crore Q4FY17 Q4FY16 YoY (%) Q3FY17 QoQ (%) Revenue 289.5 226.7 27.7 252.2 14.8 EBITDA 151.5 103.2 46.8 126.3 19.9 EBITDA (%) 52.3 45.5 680 bps 50.1 224 bps PAT 101.8 64.6 57.7 84.3 20.8 Key Financials Crore FY16 FY17E FY18E FY19E Net Sales 1,408.1 1,113.7 2,584.4 2,836.6 EBITDA 667.4 570.2 1,264.5 1,388.0 Net Profit 425.9 378.7 851.5 900.8 EPS ( ) 13.0 11.5 25.9 27.4 Valuation summary (x) FY16 FY17E FY18E FY19E P/E 30.7 34.5 15.3 14.5 Target P/E 29.7 33.4 14.8 14.0 EV / EBITDA 19.9 22.8 9.7 8.8 P/BV 2.5 2.3 2.1 1.8 RoNW (%) 8.0 6.7 12.7 12.7 RoCE (%) 11.0 8.6 17.2 17.4 Stock data Particular Amount ( crore) Market Capitalization 13,063.9 Total Debt 901.6 Cash 395.3 EV 13,570.2 52 week H/L ( ) 414 / 256 Equity capital 328.2 Face value ( ) 1 Price performance (%) Return % 1M 3M 6M 12M Oberoi Realty 7.2 20.8 17.8 50.4 Sobha Limited 2.0 50.6 56.2 36.4 BSE Realty 17.0 34.7 34.3 47.0 Research Analyst Deepak Purswani, CFA deepak.purswani@icicisecurities.com Vaibhav Shah vaibhav.shah@icicisecurities.com Ends year with better sales volumes May 8, 2017 Oberoi Realty (OBEREA) 398 Oberoi Realty's (ORL) Q4FY17 sales volumes grew 27.5% sequentially to 1.35 lakh sq ft with sales value of 345.4 crore. Sales volumes were above our estimates of 1.23 lakh sq ft mainly on account of higher-than-expected sales volume of 45427 sq ft in Three Sixty West project (our expectation: 25000 sq ft) Revenues grew 27.7% YoY to 289.5 crore, in line with our estimate of 288.3 crore The EBITDA margin expanded 680 bps YoY to 52.3% mainly on account of a change in the project mix (our expectation of 48.7%) Net income grew 57.7% YoY to 101.8 crore, marginally above our expectation of 93.9 crore The board of directors of the company have recommended a dividend of 2 per share for FY17 Posts strong sales volume growth in Q4FY17 ORL s sales volumes grew robustly at 27.7% QoQ to 1.35 lakh sq ft in Q4FY17 on account of strong sales performance across projects. Sales volumes were boosted by Three Sixty West and Prisma projects where it managed to sell 45427 sq ft & 12364 sq ft, respectively. For FY17, the company managed to clock sales volumes of 0.6 msf vs. 1.3 msf in FY16 due to demonetisation impact and absence of any new launches. With a strong performance in Q4FY17, the management believes demonetisation has turned out to be a non-event and expects a demand revival. Going forward, the company would look to launch subsequent phases of Borivali and Mulund projects. Also, in FY18E, it is planning to launch the third phase of the Goregaon project. Consequently, we have built in sales volumes of 1.7 msf in FY19E. Further, with revenue recognition from newly launched projects, we expect topline, PAT to grow at 59.6%, 54.2% CAGR to 2836.6 crore, 900.8 crore, respectively, in FY17-19E. RERA to bring in consolidation in sector RERA has been implemented from May 1, 2017 in Maharashtra. RERA seeks to bring clarity and fair practices that would protect the interests of buyers and also impose penalties on errant builders. It would bring in much needed transparency in the real estate sector and also consumer s confidence back into the sector. Though there could be some near term hiccups during the transition phase towards RERA, over the long term, it would benefit organised players like Oberoi as it would lead to consolidation in the sector. Further, the management felt that RERA implementation would not impact their routine operations. Looking to commence operations at new malls by 2019-20 ORL is looking to set up new malls in Worli and Borivali area. In Worli, the company is planning a mixed use development of 1 mn sq ft (msf) on the Glaxo land, which includes a luxury mall over 0.5 msf and a hotel and some residential plots over the remaining area. The decision to develop malls comes in the backdrop of success of existing malls in the region and the demand for quality space from various brands. It is looking to start operations at the Worli mall by 2019-20 and for hotel by 2019. Await pick-up in sales volumes; maintain HOLD We like ORL given the quality of land bank, its healthy balance sheet & management bandwidth to execute large projects. Though sales volumes look strong sequentially, we await a meaningful pick-up in sales volumes, going forward. Further, the recent rally in the stock (up ~21% in past three months) leaves no room for upside. Hence, we continue to maintain our HOLD recommendation on the stock with revised TP of 385. ICICI Securities Ltd Retail Equity Research

[ Variance analysis Q4FY17 Q4FY17E Q4FY16 YoY (Chg %) Q3FY17 QoQ (Chg %) Comments Income from Operation 289.5 288.3 226.7 27.7 252.2 14.8 Revenues grew 27.7% YoY to 289.5 crore and were in line with our estimate of 288.3 crore Other Income 12.5 12.7 10.6 17.3 12.7-1.7 Operating Cost 109.8 109.6 96.0 14.4 99.7 10.2 Employee cost 17.0 13.0 14.4 17.9 17.3-1.6 Other expenditure 11.3 10.3 13.1-14.3 9.0 25.3 EBITDA 151.5 140.5 103.2 46.8 126.3 19.9 EBITDA Margin (%) 52.3 48.7 45.5 680 bps 50.1 224 bps The EBITDA margin expanded 680 bps YoY to 52.3% mainly on account of a change in the project mix Depreciation 12.3 12.5 12.2 0.4 12.5-1.8 Interest 1.4 1.5 0.1 1,957.1 1.5-3.4 PBT 150.2 139.2 101.6 47.9 125.0 20.2 Taxes 49.2 45.3 37.0 33.1 40.7 21.0 PAT 101.8 93.9 64.6 57.7 84.3 20.8 PAT grew robustly at 57.7% YoY to 101.8 crore, marginally above our estimates of 93.9 crore Key Metrics Sales Volume (in sq ft) 135,396 122,500 142,994-5.3 106,214 27.5 Sales volume was above our estimates of 1.23 lakh sq ft mainly on account of higher-than-expected sales volume of 45427 sq ft in Three Sixty West project (our expectation: 25000 sq ft) Change in estimates FY17 FY18E FY19E ( Crore) Old New % Change Introduced Comments Revenue 1,113.7 2,587.4 2584.4-0.1 2836.6 We have marginally tweaked our FY18E assumptions and introduced FY19E numbers EBITDA 570.2 1,311.9 1264.5-3.6 1388.0 EBITDA Margin (%) 51.2 50.7 48.9-177 bps 48.9 PAT 378.7 863.8 851.5-1.4 900.8 EPS ( ) 11.5 26.3 25.9-1.4 27.4 Assumptions FY15 FY16 FY17 FY18E FY18E FY19E Comments Volume sold in msf New Earlier Introduced Goregaon 0.2 0.2 0.1 0.3 0.4 0.5 Andheri/Borivali 0.1 1.1 0.2 0.3 0.4 0.5 Worli 0.2 0.2 0.2 0.2 Mulund 0.7 0.1 0.2 0.3 0.3 Pune 0.2 0.2 Total 1.0 1.3 0.6 0.9 1.4 1.7 We have introduced FY19E estimates at 1.7 msf ICICI Securities Ltd Retail Equity Research Page 2

Conference call highlights: Project updates: The company received approvals for an additional residential area of 5.3 lakh sq ft in tower A of the Three Sixty West project. Further, the management expects the Mulund projects to hit the revenue recognition threshold probably by FY18E end. The company also expects to complete construction of Esquire project by December, 2017. It is also looking to sell the remaining inventory in the Exquisite project in the next three quarters. The management also expects the Worli project to hit revenue recognition threshold New launches: The company is looking to launch Phase III of Goregaon Project in FY18 New mall on Glaxo land: In Worli, the company is planning a mixed development of 1 msf on Glaxo land, which includes a luxury mall over 0.5 msf & a five star hotel and some residential plots over the remaining area. It is looking to start the operations at mall by 2019-20 and hotel by 2019 Samsung Deal: Samsung India Electronics has leased ~1.1 lakh sq ft space (four additional floors) in Oberoi Commerz II Phase I in Goregaon Demonetisation impact: The management believes that demonetisation has turned out to be a non-event for the company ICICI Securities Ltd Retail Equity Research Page 3

Company Analysis Sales volumes to remain under pressure Sales volumes grew 27.7% sequentially to 1.35 lakh sq ft. They were above our estimates of 1.23 lakh sq ft on account of higher-than-expected sales volume of 45427 sq ft in Three Sixty West project (our expectation: 25000 sq ft) and sales volumes of 12364 sq ft in Prisma project (our expectation: 2500 sq ft). Furthermore, sales value was at 345.4 crore for Q4FY17. For FY17E, sales volumes were at 5.56 lakh sq ft. Going forward, the company would look to launch subsequent phases of Borivali and Mulund projects. Also, in FY18E, it is planning to launch the third phase of the Goregaon project. Consequently, we have built in sales volumes of 1.7 msf in FY19E. Exhibit 1: Sales volume picking up Exhibit 2: Sales volumes to remain under pressure (lakh sq ft) 12.0 1 8.0 6.0 4.0 2.0 7.5 Q4FY15 0.8 Q1FY16 0.6 Q2FY16 10.2 Q3FY16 1.4 Q4FY16 1.5 Q1FY17 1.77 Q2FY17 1.06 Q3FY17 1.35 Q4FY17 (mn sq ft) 2.0 1.7 1.5 1.3 0.2 1.0 0.3 0.9 1.0 0.2 0.2 0.5 0.6 0.2 0.5 0.5 0.1 0.3 0.2 0.3 0.1 0.4 0.5 0.2 0.2 0.2 0.1 0.3 1.1 FY13 FY14 FY15 FY16 FY17E FY18E FY19E Goregaon Andheri/Borivali Worli Mulund Pune Launches in Borivali, Mulund to impact overall realisation ORL s average realisation has been at a higher level mainly due to higher proportion of Oberoi Exquisite and Oberoi Esquire projects. However, going ahead, with higher proportion of sales volume to be derived from its Mulund and Borivali projects, we expect average realisation to come down from current levels. Exhibit 3: Quarterly average realisation trend 25,000 Exhibit 4: Annual realisation trend across projects 30,000 ( per sq ft) 20,000 15,000 10,000 22,003 24,078 24,231 24,231 Goregaon (Exquisite) 20,967 21,305 19,153 19,153 Goregaon (Escquire) 21,512 21,512 21,512 21,512 Andheri 16,715 16,856 16,623 16,450 Overall ( per sq ft) 25,000 20,000 15,000 10,000 Goregaon (Exquisite) Goregaon (Escquire) Mulund Borivali Overall Q1FY17 Q2FY17 Q3FY17 Q4FY17 FY15 FY16 FY17E FY18E FY19E ICICI Securities Ltd Retail Equity Research Page 4

Exhibit 5: Ongoing residential projects operational metrics Particulars Q4FY17 Q3FY17 Q2FY17 Q1FY17 Q4FY16 Q3FY16 Area Booked (sq ft) Oberoi Esquire 21106 28016 16920 8008 22610 28,035 Oberoi Exquisite 6890 1820 25102 18220 14430 13,475 Three Sixty West 45427 28686 68288 55320-9,562 Priviera - - - - 2350 4,700 Prisma 12364 2602 11395 20188 5204 12,151 Eternia 13140 6240 15380 5010 6680 1,890 Enigma 10107 3070 10720 13477 7476 6,140 Sky City 26362 35780 28514 26974 83257 947,037 Total 135,396 106,214 177,306 147,197 142,007 1,023,977 Sales Value ( crore) Oberoi Esquire 38.2 53.7 53.5 16.79 46.43 64.3 Oberoi Exquisite 16.2 4.4 40.7 49 37.67 31.9 Three Sixty West 187.8 131.1 300.6 237.41-40 Priviera - - - - 15.26 33.6 Prisma 22.3 4.5 19.5 34.8 8.76 22.0 Eternia 20.7 9.9 23.7 8.3 10.84 3.2 Enigma 16.9 5.3 17.8 22.58 11.98 9.3 Sky City 43.3 58.6 45.8 46.32 133.61 1567.15 Average Realization for the quarter ( /sq ft) Oberoi Esquire 18,113 19,153 31,608 20,967 20,535 22,925 Oberoi Exquisite 23,556 24,231 16,230 22,003 26,105 23,644 Three Sixty West 41,341 45,691 44,024 42,916-41,832 Priviera** - - - - 64,936 71,532 Prisma 18,012 17,333 17,139 17,238 16,833 18,106 Eternia 15,769 15,817 15,403 16,567 16,228 16,825 Enigma 16,721 17,296 16,576 16,754 16,025 15,098 Sky City 16,421 16,383 16,048 17,172 16,048 16,548 Project Completion (%) Oberoi Esquire 71.4 63.8 57.3 52.86 43.3 39.5 Oberoi Exquisite 100 100 100 100 100 10 Three Sixty West * * * * * * Priviera 100 100 100 100 100 10 Prisma 58.1 55.8 53.9 50.48 44.4 42.3 Eternia * * * * * * Enigma * * * * * * Sky City * * * * * * Inventory as on Date (sq ft) Oberoi Exquisite 185865 192755 194575 211495 229715 244,145 Three Sixty West 1442777 1488204 1516890 1585178 1640498 1,640,498 Priviera ** 2350 2350 2350 2350 2350 4,700 Prisma 89248 101612 104214 115609 135797 141,001 Eternia# 311880 325020 331260 346640 351650 358,330 Enigma# 455434 465541 468611 479331 492808 201,625 Sky City# 880021 906383 942163 970677 1030295 947037 Note : * Yet to reach threshold # Basis area opened for booking ** Calculated on carpet area ICICI Securities Ltd Retail Equity Research Page 5

Rental, hospitality portfolio Icing on the cake ORL also enjoys a strong leasing and profitable hospitality portfolio wherein it has Commerz I & II (Commercial Space), Oberoi Mall (Retail Property) and The Westin Mumbai Garden City (Hospitality). Exhibit 6: Leasing trend In the leasing portfolio, ORL has leased out ~0.9 mn sq feet (~94% of the total available area) in Commerz I and Oberoi Mall. Beside this, ORL has also completed Commerz-II Phase I (0.7 mn sq ft). Recently, it concluded a deal with Teva Pharmaceuticals to lease out ~1 lakh sq ft. Furthermore, media reports indicate that Samsung India Electronics has leased ~1.1 lakh sq ft space in Oberoi Commerz II in Goregaon for ~ 145/sq ft per month. The lease is for nine years with 15% rental escalation every three years. Overall, the lease revenue is expected to grow to 215.0 crore in FY19E vs. 15 crore in FY16 driven by incremental leasing in Commerz II phase I. Exhibit 7: Leasing revenue trend 2.1 300 (mn sq ft) 1.8 1.5 1.2 0.9 0.6 0.3 1.3 1.2 1.0 0.8 0.8 0.9 0.9 0.9 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.3 0.5 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E ( crore) 225 150 75 0 215 192 173 122 126 135 147 150 104 103 100 78 79 87 94 94 45 67 44 46 48 47 47 46 43 43 FY12 FY13 FY14 FY15 FY16 FY17 FY18E FY19E Commerz I Commerz II Phase I Oberoi Mall Commerz I Commerz II Phase I Oberoi Mall Exhibit 8: Hotel revenue trend ORL also has The Westin Mumbai Garden City Hotel in Goregaon, which is part of the mixed development in Oberoi Garden City. It is a five star hotel with 269 rooms and is managed by the Westin Group. In FY16, it reported a revenue and EBITDA of 127.9 crore and 31.9 crore, respectively. In Q4FY17, it reported revenue of 33.9 crore and EBITDA margin of 38.9% with occupancy rate of 85.7%. Going ahead, we expect it to post a topline & bottomline of 146.2 crore and 43.8 crore, respectively, in FY19E. Exhibit 9: Westin s operating profit trend ( crore) 16 14 12 10 8 6 4 2 112.7 122.8 128.0 126.6 136.0 146.2 ( crore) 5 4 3 2 1 34.5 32.5 30.3 3 3 26.9 34.2 33.0 41.6 43.6 40.8 43.8 FY14 FY15 FY16 FY17 FY18E FY19E 36 33 30 27 24 (%) FY14 FY15 FY16 FY17 FY18E FY19E EBITDA Margins (RHS) ICICI Securities Ltd Retail Equity Research Page 6

Exhibit 10: Operational trend in Oberoi s rental and hospitality portfolio Particulars Q4FY17 Q3FY17 Q2FY17 Q1FY17 Q4FY16 Oberoi Mall (Retail Property) Operating Revenue ( crore) 25.7 25.3 24.7 24.4 22.8 EBITDA margin (%) 93.3 93.9 93.6 92.6 94.1 Occupancy (%) 99.7 99.9 90.9 90.8 99.5 Realisation ( /sqft/month) 155 152 164 162 138 Commerz I (Commercial Space) Operating Revenue ( crore) 12.0 12.0 11.8 11.9 11.2 EBITDA margin(%) 99.5 98.8 100.3 99.2 99.0 Occupancy (%) 88.5 88.5 88.5 88.5 88.5 Realisation ( /sqft/month) 142 142 140 141 132 Commerz II Phase I (Commercial Space) Operating Revenue ( crore) 8.2 7.3 4.1 3.5 2.7 EBITDA margin(%) 80.4 68.4 49.6 41.6-16.3 Occupancy (%) 29.9 29.9 27.1 13.0 13.0 Realisation ( /sqft/month) 126 114 125 122 117 The Westin Mumbai Garden City (Hospitality) Operating Revenue ( crore) 33.9 34.6 29.5 28.7 32.6 EBITDA margin(%) 38.9 39.4 28.8 29.2 34.1 Average Room Rate ( ) 8532 8889 8226 8166 9041 Occupancy (%) 85.7 81.5 75.0 77.3 77.5 RevPAR ( ) 7312 7255 6173 6310 7026 ICICI Securities Ltd Retail Equity Research Page 7

Recognised revenues to grow at 59.6% CAGR over FY17-19E ORL s revenues are expected to grow at a CAGR of 59.6% CAGR during FY17-19E Revenues de-grew 20.9% YoY to 1113.7 crore in FY17 in the absence of any new project hitting revenue recognition threshold and slow sales momentum. Going forward, we expect revenues to grow robustly at 59.6% CAGR in FY17-19E to 2836.6 crore with Mulund projects expected to hit revenue recognition threshold by FY18E end and more revenues expected to get recognised from completed projects such as Oberoi Exquisite. Exhibit 11: Revenues to grow at 59.6% CAGR over FY17-19E 3500 3000 2500 CAGR - 59.6% 2,584.4 2,836.6 ( crore) 2000 1500 1000 922.7 1,408.1 1,113.7 500 FY15 FY16 FY17 FY18E FY19E EBITDA margin to rise marginally ORL s EBITDA margin has dropped significantly in FY16 to 47.7% from ~56.5% in FY15. Going ahead, we expect margins to be in the range of 48-51% given the larger share of residential revenues recognition, which is typically of lower margins than hospitality and leasing. Exhibit 12: EBITDA margin trend 60 55 55.8 50 47.4 51.2 48.9 48.9 (%) 45 40 35 FY15 FY16 FY17 FY18E FY19E ICICI Securities Ltd Retail Equity Research Page 8

Net profit to grow at 54.2% CAGR during FY17-19E We expect ORL s bottomline to grow at a CAGR of 54.2% during FY17-19E to 900.8 crore, with Eternia & Enigma projects hitting revenue recognition during this period Overall, we expect ORL s bottomline will grow at a CAGR of 54.2% during FY17-19E to 900.8 crore, with Eternia, Enigma & SkyCity projects hitting revenue recognition during this period. This would aid the bottomline significantly, going forward. Exhibit 13: PAT to grow at 54.2% CAGR during FY17-19E ( crore) 1000 900 800 700 600 500 400 300 200 100 0 CAGR - 54.2% 317.8 425.9 378.7 851.5 900.8 FY15 FY16 FY17 FY18E FY19E Return ratio to bounce back in FY19E Given the lower revenue recognition and profitability in FY17, ORL s return ratio dropped to single digit in FY17. However, with better revenues and profitability coming in FY18E & FY19E, we expect ORL s return ratio to bounce to levels of 19.3% RoCE and 14.7% RoE in FY19E. Exhibit 14: Return ratio to bounce back 24 20 18.8 19.3 (%) 16 12 8 4 8.8 6.9 11.0 8.0 8.3 6.3 13.7 14.7 0 FY15 FY16 FY17E FY18E FY19E RoCE RoNW ICICI Securities Ltd Retail Equity Research Page 9

Outlook and Valuation We like the company given the quality of land bank, its healthy balance sheet & management bandwidth to execute large projects. Though sales volumes look strong sequentially, we await a strong pick-up in the sales volumes, going forward. Further, the recent rally in the stock (up ~21% in past three months) leaves no room for upside. Hence, we continue to maintain our HOLD rating on the stock with a revised TP of 385. Exhibit 15: Valuation Location Type Status Saleable Area ( in mn sq ft) NAV NAV Multiple Value ( cr) /share Goregaon 10.1 5,992.2 5,527.8 163.0 Oberoi Mall Retail Completed 0.6 1,123.5 1.0 1,123.5 33.1 Commerz I Commercial Completed 0.4 479.1 1.0 479.1 14.1 Westin Hotel Completed 0.4 1,076.0 1.0 1,076.0 31.7 Exquisite II Residential Ongoing 1.5 755.8 1.0 755.8 22.3 Commerz II Phase I Commercial Ongoing 0.7 940.6 0.9 799.5 23.6 Exquisite III Residential Planned 1.9 53.8 1.0 53.8 1.6 Commerz II Phase II Commercial Planned 1.7 1,293.4 0.8 970.1 28.6 Oberoi International school Social Infrastructure Ongoing 0.3 Education complex Planned 0.9 111.9 1.0 111.9 3.3 Hospital Planned 0.4 Andheri/Khar/Borivali 3.1 3,469.2 3,441.5 101.5 Oberoi Maxima Commercial Ongoing 0.3 209.6 0.9 188.7 5.6 Oberoi Prisma Residential Ongoing 0.7 104.1 1.0 104.1 3.1 Oberoi Splendour IT park Commercial Planned 0.1 68.1 0.9 61.3 1.8 Oberoi Splendour school Social Infrastructre Planned 0.4 14.7 1.0 14.7 0.4 Borivali Residential 4.5 3,072.8 1.0 3,072.8 90.6 Worli 3.4 2,012.2 1,716.8 50.6 Oasis Residential Residential Ongoing 2.3 535.2 1.0 535.2 15.8 Oasis Commercial Commercial Ongoing 0.2 121.2 0.8 97.0 2.9 Oasis Mall Retail Ongoing 0.1 61.4 0.8 49.1 1.4 Oasis Hospitality Hospital Ongoing 0.2 83.6 0.8 66.9 2.0 I-Ventures Residential 0.5 1,210.6 0.8 968.5 28.6 Mulund 3.2 1,513.9 1,513.9 44.6 Eternia Residential Ongoing 1.6 724.6 1.0 724.6 21.4 Enigma Residential Ongoing 1.6 789.4 1.0 789.4 23.3 Pune 1.3 77.6 71.0 2.1 Sangam city - Residential Residential Planned 0.8 44.5 1.0 44.5 1.3 Sangam city - Commercial Commercial Planned 0.3 16.8 0.8 13.5 0.4 Sangam city - Retail Retail Planned 0.3 16.3 0.8 13.0 0.4 Net cash/ (Debt) 697.4 1.0 697.4 20.6 Total 21.2 13,762.5 0.9 12,968.3 383 Rounded off Target price 385 Exhibit 16: Valuation Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE ( cr) (%) ( ) (%) (x) (x) (%) (%) FY16 1399.7 53.7 13.0 34.0 30.7 19.9 8.0 11.0 FY17E 1107.6-20.9 11.5-11.1 34.5 22.8 6.7 8.6 FY18E 2577.6 132.7 25.9 124.9 15.3 9.7 12.7 17.2 FY19E 2829.2 9.8 27.4 5.8 14.5 8.8 12.7 17.4 ICICI Securities Ltd Retail Equity Research Page 10

Recommendation History vs. Consensus 500 10 ( ) 375 250 8 6 4 2 (%) 125 Apr-15 Jul-15 Sep-15 Dec-15 Feb-16 May-16 Jul-16 Sep-16 Dec-16 Feb-17 May-17 Price Idirect target Consensus Target Mean % Consensus with BUY Source: Bloomberg, Company, ICICIdirect.com Research Key events Date Jun-15 Jun-15 Aug-15 Oct-15 Mar-16 Mar-16 Apr-16 May-16 Event As per media sources, Oberoi Realty to buy Crompton Greaves Worli building spread over ~1 acre for over 200 crore. Oberoi Realty approves raising of 324 crore through preferential issue of shares to Aranda Investments, an indirect subsidiary of Temasek Holdings As per media sources, Oberoi Realty to buy Crompton Greaves Worli building spread over ~1 acre for over 200 crore. Oberoi Realty launches its multi-tower project Sky City at Borivali spread across 25 acres consisting of multiple towers of up to 60 storeys each. The project has a saleable area of ~4.5 million square feet (msf) and the company expects to earn revenues of ~ 6000-7000 crore from the project The Bombay High Court stays new constructions of either residential/commercial buildings or hotels in Mumbai from March 1, 2016 because the state government and Brihanmumbai Municipal Corporation (BMC) have failed to comply with the municipal solid waste (MSW) rules at Deonar and Mulund dumping grounds,due to which Oberoi will be unable to launch projects until the ban is lifted Rajya Sabha passes the real estate regulation bill paving the way for regulation in the real estate sector. The bill would promote timely execution of projects, ensure speedy adjudication of disputes and help promote private participation, positive for Oberoi Swedish furniture retailing giant Ikea in talks with Oberoi Realty to buy a built-to-suit retail space for over 900 crore in Borivali. As per media reports, if the deal happens, this will monetise Oberoi's landbank at better prices of ~ 112.5 crore per acre vs. Oberoi's acquisition price of ~ 46.2 crore per acre Oberoi allots 59,104 equity Shares of 10 each to certain option grantee(s) pursuant to exercise by them of options granted to them under Company s Employee Stock Option Scheme 2009. The exercise price for options is 260/ share. Post allotment, share capital has increased to 339.4 crore. Aug-16 According to media sources, Oberoi Realty is in talks with US-based investor Morgan Stanley and Singapore s sovereign fund, GIC, to set up a joint venture (JV) for developing malls. The venture would have a corpus of 1,000 crore. Oberoi is expected to hold about 75%. Further, it could also initiate talks with Canada Pension Plan Investment Board, which has shown an interest in buying in malls Sep-16 Teva Pharmaceuticals buys ~1.0 lakh sq ft space in Oberoi Commerz II in Goregaon Mar-17 Samsung India Electronics leases ~1.1 lakh sq ft space in Oberoi Commerz II in Goregaon for ~ 145/ sq ft per month. The lease is for nine years with 15% rental escalation every three years Top 10 Shareholders Rank Name Latest Filing Date % O/S Position (m) Change (m) 1 Oberoi (Vikas Ranvir) 30-Sep-16 62.7% 212.9 2 R S Estate Developers Pvt. Ltd. 30-Sep-16 9.8% 33.3 3 Aranda Investments (Mauritius) Pte. Ltd. 30-Sep-16 3.7% 12.4 4 Franklin Advisers, Inc. 28-Feb-17 2.2% 7.4 0.4 5 APG Asset Management 30-Sep-16 1.6% 5.5 0.1 6 OppenheimerFunds, Inc. 30-Sep-16 1.4% 4.8 7 BlackRock Asset Management North Asia Limited 30-Sep-16 1.3% 4.4 0.5 8 FIL Investment Management (Singapore) Ltd. 31-Jan-17 1.2% 4.1 9 SSIII Indian Investments Two, Ltd. 30-Sep-16 0.9% 3.0-6.8 10 The Vanguard Group, Inc. 28-Feb-17 0.7% 2.5 Source: Reuters, ICICIdirect.com Research Shareholding Pattern (in %) Jun-16 Sep-16 Dec-16 Mar-17 Promoter 72.54 72.54 72.53 72.5 FII 22.07 24.23 25.35 25.35 DII 0.68 0.51 0.31 0.57 Others 4.71 2.72 1.81 1.57 Recent Activity Buys Sells Investor name Value (m) Shares (m) Investor name Value (m) Shares (m) TT International 3.9 0.7 J.P. Morgan Asset Management (Hong Kong) Ltd. -3.3-0.7 Franklin Advisers, Inc. 2.0 0.4 Alpine Woods Capital Investors, LLC -0.6-0.1 Templeton Investment Counsel, L.L.C. 0.5 0.1 Stewart Investors -0.6-0.1 Amundi Asset Management 0.4 0.1 Skagen AS -0.5-0.1 BlackRock Investment Management, LLC 0.3 0.1 UTI International (Singapore) Pvt. Ltd. -0.3-0.1 Source: Reuters, ICICIdirect.com Research ICICI Securities Ltd Retail Equity Research Page 11

Financial summary Profit and loss statement ( Crore) (Year-end March) FY16 FY17 FY18E FY19E Net Sales 1,399.7 1,107.6 2,577.6 2,829.2 Other Operating Income 8.4 6.2 6.8 7.5 Total Operating Income 1,408.1 1,113.7 2,584.4 2,836.6 Growth (%) 52.6-20.9 132.0 9.8 Operating Costs 629.7 437.1 1,201.3 1,323.8 Employee Expenses 57.6 64.2 67.4 70.7 Other Expenses 53.3 42.3 44.5 46.7 Total Operating Expenditure 740.6 543.6 1,313.1 1,441.2 EBITDA 659.1 564.0 1,264.5 1,388.0 Growth (%) 28.1-15.5 121.8 9.8 Depreciation 49.0 49.5 51.9 37.8 Interest 0.2 5.6 62.9 62.9 Other Income 36.2 47.3 52.0 57.2 PBT 654.5 562.4 1,201.7 1,344.4 Prior Period Adjustments Total Tax 228.6 186.9 396.6 443.7 PAT before profit from associates 425.9 375.6 805.1 900.8 Minoriy Interest Profit from associates 3.1 46.4 76.1 PAT 425.9 378.7 851.5 900.8 EPS ( ) 13.0 11.5 25.9 27.4 Cash flow statement ( Crore) (Year-end March) FY16 FY17E FY18E FY19E Profit after Tax 425.9 378.7 851.5 900.8 Depreciation 49.0 49.5 51.9 37.8 Interest 71.7 5.6 62.9 62.9 Others -23.8-47.3-52.0-57.2 Net Increase in Current Assets -428.6 53.9-583.5-660.5 Net Increase in Current Liabilities 329.1-49.7 548.8-94.3 Net cf from operating activities 426.7 390.6 879.6 189.5 (Purchase)/Sale of Fixed Assets -46.5-25.0-25.0-25.0 Others -23.8-47.3-52.0-57.2 Net cf from Investing Activities -243.4-127.7 27.0 32.2 Inc / (Dec) in Equity Capital 325.8 Inc / (Dec) in Loan Funds -26 35 (Payment) of Dividend & Div. Tax -160.7-87.1-127.7-135.1 Interest paid -86.2-5.6-62.9-62.9 Net cf from Financing Activities -181.2 257.3-190.7-198.1 Net Cash flow 2.1 520.3 716.0 23.7 Opening Cash/Cash Equivalent 293.7 320.9 841.1 1,557.1 Closing Cash/ Cash Equivalent 320.9 841.1 1,557.1 1,580.8 Balance sheet ( Crore) (Year-end March) FY16 FY17E FY18E FY19E Equity Capital 339.3 339.3 339.3 339.3 Preference Capital Reserve and Surplus 4,965.0 5,256.6 5,980.4 6,746.0 Total Shareholders funds 5,304.3 5,595.9 6,319.7 7,085.4 Total Debt 641.5 991.5 991.5 991.5 Deferred Tax Liability 22.9 22.9 22.9 22.9 Total Liabilities 5,968.7 6,610.3 7,334.1 8,099.7 Assets Gross Block 1,185.5 1,210.5 1,235.5 1,260.5 Less Accumulated Depreciation 208.3 257.8 309.7 347.6 Net Block 977.1 952.6 925.7 912.9 Capital WIP 53.9 53.9 53.9 53.9 Total Fixed Assets 1,031.0 1,006.5 979.7 966.8 Goodwill on consolidation 265.4 265.4 265.4 265.4 Investments 74.4 224.4 224.4 224.4 Inventory 3,930.6 4,206.9 4,494.6 4,937.9 Debtors 117.0 119.3 143.1 171.7 Loans and Advances 1,993.7 1,661.4 1,933.2 2,121.9 Cash 320.9 841.1 1,557.1 1,580.8 Other Current Assets 26.7 26.7 26.7 26.7 Total Current Assets 6,388.9 6,855.3 8,154.8 8,839.0 Creditors 1,786.7 1,737.0 2,285.8 2,191.5 Provisions 4.4 4.4 4.4 4.4 Net Current Assets 4,597.8 5,113.9 5,864.6 6,643.1 Deferred Tax Assets Total Assets 5,968.7 6,610.3 7,334.1 8,099.7 Key ratios (Year-end March) FY16 FY17E FY18E FY19E Per share data ( ) EPS 13.0 11.5 25.9 27.4 Cash EPS 14.5 13.0 27.5 28.6 BV 161.6 170.5 192.5 215.9 Operating profit per share 20.3 17.4 38.5 42.3 Cash Per Share 9.8 25.6 47.4 48.2 Operating Ratios (%) EBITDA Margin 47.7 51.5 49.1 49.1 PBT / Net Sales 46.8 50.8 46.6 47.5 PAT Margin 30.4 33.9 31.2 31.8 Inventory days 1,025 1,386 636 637 Debtor days 31 39 20 22 Creditor days 467 574 324 283 Return Ratios (%) RoE 8.0 6.7 12.7 12.7 RoCE 11.0 8.6 17.2 17.4 RoIC 11.2 9.5 22.1 21.6 Valuation Ratios (x) P/E 30.7 34.5 15.3 14.5 EV / EBITDA 19.9 22.8 9.7 8.8 EV / Net Sales 9.5 11.7 4.8 4.3 Market Cap / Sales 9.3 11.8 5.1 4.6 Price to Book Value 2.5 2.3 2.1 1.8 Solvency Ratios (x) Debt / EBITDA 1.0 1.7 0.8 0.7 Debt / Equity 0.1 0.2 0.2 0.1 Current Ratio 3.4 3.5 2.9 3.3 Quick Ratio 1.2 1.0 0.9 1.1 ICICI Securities Ltd Retail Equity Research Page 12

ICICIdirect.com coverage universe (Real Estate) CMP M Cap EPS ( ) P/E (x) EV/EBITDA (x) P/B (x) RoE (%) Sector / Company ( ) TP( ) Rating ( Cr) FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E FY16 FY17E FY18E Oberoi Realty (OBEREA) 398 385 Hold 13,062 13.0 11.5 25.9 30.7 34.5 15.3 19.9 22.8 9.7 2.5 2.3 2.1 8.0 6.7 12.7 Sobha (SOBDEV) 412 415 Hold 4,040 15.6 16.4 20.7 25.5 24.3 19.3 12.0 14.5 11.4 1.5 1.5 1.4 6.0 6.1 7.3 ICICI Securities Ltd Retail Equity Research Page 13

RATING RATIONALE ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock. Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction; Buy: >10%/15% for large caps/midcaps, respectively; Hold: Up to +/-10%; Sell: -10% or more; Pankaj Pandey Head Research pankaj.pandey@icicisecurities.com ICICIdirect.com Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai 400 093 research@icicidirect.com ICICI Securities Ltd Retail Equity Research Page 14

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ICICI Securities Ltd Retail Equity Research Page 15