Midcap Spotlight: This realty stock is on a tear despite its chequered past

Shares of Omaxe Ltd climbed 8% during Tuesday’s session, hitting an intraday high of ₹97.90 apiece. The rally extends the stock’s recent momentum, with Omaxe gaining around 24% over the past month and 20% so far this year.Even after the recent surge, however, the stock remains about 15% below its 52-week high of ₹110, which it hit last year on July 18.

The latest optimism follows the company’s announcement on June 29 that it will enter the hospitality business through a dedicated vertical. Omaxe plans to invest ₹6,200 crore over the next four to five years to develop 19 hotels spanning around 5 million square feet across five states.The company expects the hospitality portfolio to generate approximately ₹1,000 crore in annual revenue once stabilised, expanding its presence to 13 cities.

While the expansion has improved investor sentiment, the company’s financial position continues to warrant close attention.

Omaxe’s free cash flow declined sharply to ₹186 crore in FY26, compared with ₹999 crore in FY25, while total borrowings nearly doubled to ₹1,466 crore from ₹744 crore a year earlier. The company’s reserves also slipped deeper into negative territory at ₹1,084 crore, compared with negative ₹388 crore in FY25.Operational metrics remain under pressure as well. Interest coverage stayed negative at 1.4 times in FY26, highlighting continued earnings pressure relative to finance costs.

The company has also attracted investor interest through strategic capital raising. In May, WSB invested ₹75 crore in the Omaxe Group to support its expansion into Tier-II markets.

Despite the recent rally, Omaxe continues to carry significant legacy challenges. The company has faced regulatory scrutiny over the years, including a SEBI order barring the company and its Chairman and Managing Director from the securities market for two years over alleged irregularities in its financial statements.

Credit rating agency CareEdge had also highlighted liquidity concerns, citing declining collections, higher dependence on debt funding and adverse regulatory orders. Its long-term bank facility ratings were subsequently withdrawn.

In addition, Omaxe has faced multiple complaints before RERA and consumer forums over project delays and construction quality, while group company Omaxe Infrastructure and Construction was dissolved following liquidation under the National Company Law Tribunal (NCLT).

Another point to note for investors is that Omaxe does not provide regular operational disclosures such as bookings, sales volumes or collections, making it harder to track business momentum quarter-on-quarter.