The Company has opted to apply the modified retrospective approach as per the new accounting standard i.e. Ind AS 115 [Revenue from Contracts with Customers] that become effective from 1^st April 2018, and in respect of the contracts not complete as of April I, 2018 (being the transition date), has made adjustments to retained earnings, recognizing revenue of Rs 493.24 crore, only to the extent of costs incurred, as the relevant projects were in early stages of development. Consequently, there is no impact on retained earnings as at the transition date. While recognizing revenue, the cost of land has been allocated in proportion to the construction cost incurred as compared to the accounting treatment hitherto of recognizing revenue in proportion to the actual cost incurred (including land cost). Consequently, in respect of the quarter ended December 31, 2018, revenue and profit after tax was higher by Rs 97.20 crore and Rs 12.61 crore respectively. Under modified retrospective approach, the comparatives for the previous period figures are not required to be restated and hence are not comparable.

• Sale was up by 48% to Rs 528.62 crore driven largely by strong growth in revenue in both developmental projects as well as rentals. While the revenue of developmental projects was up by 58% to Rs 393.86 crore driven largely by revenue recognition from newer projects that are under construction especially the Sky City project at Borivli, Mumbai. Revenue recognition at Sky City, Eternia and Enigma together was Rs 322.74 crore compared to nil in the corresponding previous period. The revenue recognition of completed projects such as Esquire, Exquisite and Prisma together was down by 71% to Rs 71.12 crore. Similarly the rental income was up by 43% to Rs 84.85 crore with additional area under lease at Commerz II. While the Hospitality revenue was up by 3% to Rs 36.12 crore that of property management revenue was up by 4% to Rs 11.48 crore.
  
• The operating margin crashed by 1850 bps to 35.6% largely due to project mix as well as newer project not crossing the profit recognition threshold. Thus the operating profit was down by 2% to Rs 188.09 crore.
  
• Other income was up by 385% to Rs 20.17 crore and thus the PBIDT was up by 6% to Rs 208.26 crore. With interest up by 169% to Rs 4.85 crore the growth at PBDT was restricted at 4% to Rs 203.41 crore. The depreciation was down by 6% to Rs 11.41 crore and thus the PBT before profit/loss from associate was up by 5% to Rs 192 crore. Share of profit from associate was up by 241% to Rs 3.24 crore and thus the PBT was up by 6% to Rs 195.24 crore.
  
• Taxation was lower by 10% to Rs 57.31 crore and thus the PAT was up by 15% to Rs 137.93 crore.

Nine month performance

Sale for the period was leaped by 118% to Rs 2008.99 crore. But with OPM contract by 630 bps to 47.1%, the growth at operating profit was restricted at 92% to Rs 945.64 crore. After accounting for higher OI, higher interest cost, lower depreciation and higher share of profit from JVs the PBT was up by 103% to Rs 957.50 crore. Though taxation in absolute term stand higher by 91% to Rs 296.33 crore the tax rate was lower at 31% compared to 32.9% in corresponding previous period. Thus the PAT was up by 109% to Rs 661.17 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 1142.91 crore and profit after tax was lower by 120.76 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 "2018 was a year of transformation for the real estate industry in more ways than one. On the one hand it evolved to adapt to the path-breaking reforms of the government and rapidly changing market dynamics. On the other hand, the NBFC crisis also created its own turmoil for many players in the sector. While RERA has already started the consolidation process, NBFC will become the catalyst for accelerating the same. Today, the industry is favorable for developers like us with a strong focus on customer-centricity, financial prudence and compliance. At Oberoi Realty, we have grown from strength to strength through our sustained emphasis on enhancing value for all our stakeholders and our multiple developments at prime locations across the financial capital stand testament to this. We are truly grateful to our customers for the faith that they have imposed in us through the years and will continue our journey of creating new milestones in the years to come"