CLSA retains buy on Sobha, stock jumps 4% after Q1 sales bookings increase by 22%

Shares of Sobha have risen over 4 percent this Friday morning after the company's sales bookings for the first quarter of FY19 increased by 22 percent to Rs 762.4 crore as compared to corresponding quarter last year on higher volumes.

Sobha sold 9,60,085 square feet area during the April-June quarter, up 18 percent from 8,15,230 square feet in the corresponding quarter last fiscal. Also, Sobha’s average price realisation rose 3.8 percent YoY to Rs7,941 per square feet during the period under review.

During the quarter, Sobha announced an investment of over Rs 500 crore towards residential development in Gujarat International Finance Tech-City (GIFT City) and also has other launches planned in multiple cities over the next few quarters.

In an interview to CNBC-TV18, JC Sharma, Vice Chairman and MD of Sobha said that the company can expect double-digit growth in volumes and value for the next few quarters as we move ahead. Going to launch many more projects in all the markets so the volumes should be picking up as we move forward, he added.

"We believe that next few quarters, there will be good launches and that should have a positive impact as far as our sales volumes are concerned," he further mentioned.

CLSA has maintained a buy on the stock with a target of Rs 764 per share. It believes that Q1 sales are driven by good performance in the non-Bengaluru market, adding that improvement in non-Bengaluru sales is a positive for overall market recovery.

The research firm is of the view that 13 percent growth target for FY19 pre-sales should be achievable.

At 09:58 hrs Sobha was quoting at Rs 497.35, up Rs 20.50, or 4.30 percent. It has touched an intraday high of Rs 507.00 and an intraday low of Rs 481.00.