Shares of Oberoi Realty Ltd fell sharply on Tuesday, January 20, as investors reacted to pressure on profitability and a sharp sequential decline in bookings despite revenue growth and a dividend announcement.
Oberoi Realty shares were trading 4.5% lower at Rs 1,580.50 on the NSE, compared with a previous close of Rs 1,654.90.
Margins compress despite revenue growth
For Q3 FY26, Oberoi Realty reported a 5.8% year-on-year rise in revenue to Rs 1,492.6 crore. However, profitability remained under pressure, with net profit rising just 0.7% YoY to Rs 622.6 crore, reflecting limited earnings growth despite higher topline.
EBITDA for the quarter stood flat at Rs 856 crore, while EBITDA margin declined sharply to 57.4%, compared with 60.7% in the year-ago period. The margin compression indicates higher costs and operational challenges during the quarter, which weighed on investor sentiment.
Q3 bookings and volumes disappoint
The negative stock reaction was also driven by a sharp slowdown in operational momentum. Q3 bookings declined 36%, while sales volumes fell 28% on a quarter-on-quarter basis, raising concerns over near-term growth visibility even as the broader real estate cycle remains supportive.
Dividend fails to offset concerns
Despite the weaker operating metrics, the board approved an interim dividend of Rs 2 per equity share for FY26, with January 23, 2026, set as the record date and payment expected by February 5, 2026. However, the dividend announcement was insufficient to offset concerns around margin pressure and softer bookings.
One-time labour code impact noted
The company also disclosed the impact of new labour codes implemented by the Government of India, following an actuarial valuation as of December 31, 2025. This resulted in an additional obligation of Rs 2.306 lakh, recorded as an exceptional item in the quarterly and nine-month results, though the amount remains immaterial to overall financials.
Overall, margin compression, sharply lower bookings, and muted profit growth appear to be the key reasons behind the decline in Oberoi Realty shares today, despite revenue growth and the interim dividend announcement.
