Buy Sobha; target of Rs 2058: Motilal Oswal

Motilal Oswal's research report on Sobha

SOBHA reported bookings of INR14b (37% below estimate) and -29%/+18% YoY/QoQ. SOBHA’s share of sales stood at INR12.5b, -28%/+27% YoY/QoQ. However, its share in total bookings rose to 90% due to high contributions from its 'own' projects of Sobha Neopolis and Sobha Ayana in Bangalore. In 3QFY25, the sales were mostly driven by Bangalore projects, which were 72% of the company's total bookings. The newly launched luxury project - 'Sobha Ayana' - in Bangalore contributed to ~50% of Bangalore sales. In 9M, the company launched six new projects with a total area of ~4.7msf.

Outlook

We reiterate our BUY rating on the stock with a revised TP of INR2,058 (previously INR2,213), indicating a 60% upside potential.