Oberoi Realty Q2FY23 profit rises 19.5% on robust luxury housing demand and steady retail recovery

Mumbai-based developer Oberoi Realty Limited has reported a consolidated profit after tax (PAT) of ₹318.53 crore for the second quarter of the fiscal year 2023 (Q2FY23), marking a 19.5% rise from ₹266.55 crore in the corresponding period last year. The results reflect a sustained demand for luxury residential units and a recovery in the company’s retail and hospitality segments, even as global economic sentiment remains cautious.

The consolidated revenue for the three months ended September 30, 2022 stood at ₹711.79 crore, which represents a 7.4% year-on-year increase. In the same quarter a year earlier, revenue had been ₹768.52 crore. The performance comes amid higher booking traction for large-format apartments in Mumbai and steady consumer activity in retail properties.

How did Oberoi Realty perform in the first half of FY23 compared to the previous year?

For the first six months of FY23 (H1FY23), Oberoi Realty reported a consolidated PAT of ₹722.01 crore, up a significant 107.8% from ₹347.36 crore in H1FY22. Consolidated revenue for H1FY23 was ₹1,646.6 crore, compared to ₹1,063.29 crore in the year-ago period, highlighting a strong operating momentum across its business portfolio.

The company’s earnings growth for H1 was driven by a combination of sustained residential project sales, a pick-up in leasing and retail footfalls, and improved hospitality revenues as pandemic restrictions eased. These factors supported a higher operating margin environment for the developer despite inflationary pressures on input costs.

What is driving Oberoi Realty’s residential sales in Mumbai?

According to Chairman and Managing Director Vikas Oberoi, the Mumbai property market has demonstrated exceptional resilience despite global macroeconomic volatility. In his comments on the Q2FY23 performance, he noted that India’s real estate sector is benefiting from robust consumer sentiment toward home ownership, coupled with an increased appetite for larger and better-designed apartments.

He emphasised that luxury residential projects are attracting “very good traction,” with buyers prioritising location, amenities, and lifestyle offerings. This aligns with broader industry trends in 2022 where premium and luxury housing segments saw a surge in demand, driven by affluent buyers looking for upgraded living spaces following the pandemic.

The company’s flagship developments in Mumbai, including high-rise luxury projects in Goregaon and Worli, have been key contributors to its residential sales. These projects cater to a clientele willing to invest in larger configurations with premium facilities, reflecting a wider market shift toward quality over cost efficiency in the top-tier housing segment.

How are the retail and hospitality segments contributing to growth?

Vikas Oberoi also highlighted that alongside residential real estate, Oberoi Realty’s hospitality and retail operations have been recording “overwhelming footfalls and consumption.” This rebound comes as consumer mobility returned to pre-pandemic levels and discretionary spending increased.

The company’s retail assets, such as the Oberoi Mall in Mumbai, benefitted from higher visitor numbers, sustained leasing activity, and improved tenant performance. The hospitality portfolio, including The Westin Mumbai Garden City, saw stronger occupancy rates and average room revenues supported by both business and leisure travel returning to the city.

For developers like Oberoi Realty, these segments provide diversified revenue streams beyond residential sales. This diversification helps mitigate the cyclical nature of the housing market, allowing for a more stable earnings profile.

How does the macroeconomic backdrop influence the company’s outlook?

In his statement, Vikas Oberoi described India as a “beacon of hope” in a challenging global environment. While many advanced economies faced inflationary headwinds and slowing growth in 2022, India’s GDP expansion, urbanisation trends, and relatively strong employment outlook supported real estate demand.

Industry observers in October 2022 pointed to stable interest rates for much of the preceding period, government-backed infrastructure initiatives in urban centres, and the growing appeal of home ownership post-pandemic as key factors sustaining housing momentum. The luxury housing segment, in particular, benefited from limited supply in premium locations and rising disposable incomes among high-net-worth buyers.

What sector trends are shaping real estate in Mumbai in FY23?

Mumbai’s property market in 2022 continued to show a clear segmentation between mass housing and premium projects. Developers with a strong brand, financial stability, and high-quality execution capabilities, such as Oberoi Realty, were well-positioned to capitalise on demand in the upper price brackets.

Residential launches in the city remained selective, with developers focusing on high-margin projects in established micro-markets. Buyers in the premium and luxury category were increasingly prioritising larger unit sizes and flexible layouts that could accommodate remote working needs. They were also seeking comprehensive in-house amenities such as fitness centres, landscaped gardens, and clubhouses. Proximity to business districts, educational institutions, and healthcare facilities added to the appeal. Just as important was the assurance of timely delivery and the brand reputation of the developer, which played a significant role in purchase decisions.

These evolving preferences closely aligned with Oberoi Realty’s project strategy, which targets affluent buyers seeking long-term lifestyle investments rather than purely speculative purchases.

What are the company’s prospects for the rest of FY23?

While Oberoi Realty did not issue formal guidance in its Q2FY23 update, the strong half-year results suggested that the company was on track to sustain its performance, supported by a robust pipeline of ongoing and upcoming projects.

Market analysts in October 2022 generally expected Mumbai’s high-end residential demand to remain steady in the near term, although they cautioned about potential risks from interest rate hikes and inflation. For diversified developers, retail and hospitality recovery was seen as an important earnings stabiliser, particularly if housing sales were to moderate.

Oberoi Realty’s balance sheet strength and brand positioning in the luxury segment were likely to provide competitive advantages in navigating potential headwinds.

Oberoi Realty’s Q2FY23 earnings highlight sector resilience

The Q2FY23 results underscored Oberoi Realty’s ability to capture demand in the luxury housing segment while benefiting from a revival in retail and hospitality. With a 19.5% year-on-year increase in quarterly profit and over 100% growth in first-half PAT, the company demonstrated both operational resilience and strategic execution.

As Mumbai’s real estate market continues to evolve in 2022, developers with a diversified portfolio and a focus on premium offerings appear best placed to leverage both economic recovery and changing consumer preferences.