• Sale was down by 32% to Rs 603.25 crore hit largely by strong fall in revenue from developmental projects. While the revenue of developmental projects was down by 40% to Rs 463.21 crore the revenue of hospitality was up by 5% to Rs 31.86 crore, rental assets was up by 28% to 92.71 crore. The revenue from property management was up by 13% to Rs 13.72 crore. Other operating revenue was down by 59% to Rs 1.75 crore. The revenue of non developmental projects verticals together was up by 17% to Rs 140.04 crore.
• Lower developmental project revenue was largely due to lower revenue recognition from completed projects of Esquire, Exquisite and Prisma. The revenue recognition from newer projects that are under construction i.e. Sky City, Eternia and Enigma together was up by 22% to Rs 327.78 crore. The revenue recognition of completed projects such as Esquire, Exquisite and Prisma together was down by 73% to Rs 135.44 crore from Rs 501.17 crore in the corresponding previous period.
• The operating margin crashed by 1300 bps to 39% largely due to project mix as well as newer project not crossing the profit recognition threshold. Thus the operating profit was down by 49% to Rs 235.21 crore restricted by lower sales and crash in OPM.
• Other income was up by 109% to Rs 14.85 crore and thus the PBIDT was down by 47% to Rs 250.06 crore. With interest up by 386% to Rs 23.89 crore the fall at PBDT was 51% to Rs 226.17 crore. The depreciation was up by 5% to Rs 11.09 crore and thus the PBT before profit/loss from associate was down by 53% to Rs 215.08 crore.
• Share of profit from associate was up by 14% to Rs 1.24 crore and thus the PBT was down by 52% to Rs 216.32 crore. Taxation was down by 54% to Rs 65.75 crore and thus the PAT was down by 51% to Rs 152.07 crore.
• Other comprehensive income was down by 74% to Rs 0.06 crore. The total comprehensive income was down by 51% to Rs 152.13 crore.

Pursuant to clarification issued by the International Accounting Standards Board (IASB) in relation to borrowings costs on real estate projects where revenue is recognised on percentage of completion basis, the Group has with effect from April 1, 2019, excluded such borrowings costs relating to the post launch period from its estimates of the balance cost to completion and the same are now recognized as Finance Cost in the P&L account. Consequently, for the quarter ended June 30, 2019 the finance cost are higher by Rs 17.56 crore and operating cost are lower by Rs 18.01 crore. Consequential impact on profit before tax, tax expenses is not material.

Yearly performance

Sale for the period more than doubled (up 104%) to Rs 2582.50 crore. But with OPM contract by 570 bps to 44.7%, the growth at operating profit moderated and stood at 71% to Rs 1155.37 crore. After accounting for higher OI, higher interest cost, lower depreciation and higher share of profit from JVs the PBT was up by 81% to Rs 1177.62 crore. Taxation in absolute term stand higher by 89% to Rs 360.69 crore and the tax rate was higher at 30.6% compared to 29.4% in corresponding previous period. Thus the PAT was up by 78% to Rs 816.93 crore.

Impact on account of the company adopt ‘Revenue from Contracts with Customers' of Ind AS 115, for the half year ended Sep 30, 2018, are : revenue was lower by Rs 1009.05 crore and profit after tax was lower by 105.25 crore respectively. Under modified retrospective approach, the comparatives for the previous period figures are not required to be restated and hence are not comparable.

Management Comment

Commenting on the results, Vikas Oberoi, Chairman & Managing Director, Oberoi Realty said "The last quarter saw the appointment of the new government that had brought in ground-breaking reforms in its earlier term, to be once again back at the helm with an emphatic mandate. The country has already gained from PM Modi's ‘minimum government, maximum governance' agenda. His earlier reforms like GST, RERA, insolvency code and all other similar initiatives have already put the country on the growth path. The government recently presented the Union Budget 2019-20, which was a balanced mix of reforms to encourage growth and schemes to promote welfare. The move to allow FIIs to invest in NBFC-issued debt securities deserves credit. We also believe that the recent advisory on subvention plans will accelerate consolidation in the sector and only developers with prudent financial management and a proven track record will survive. At Oberoi Realty, our ability to adapt to market sentiments has ensured our sales volume remain steady. Customer centricity and focus on delivery remain the core focus of our business and we continue to strive to better ourselves to enhance value for all our shareholders."