Accumulate Sobha Developers; target of Rs 475: Emkay

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26 Aug, 2025 12:21

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Emkay's research report on Sobha Developers

"Sobha reported sales booking of 0.75msf for Rs 4.8bn, down 20% QoQ & YoY, was worst ever quarterly run-rate in the recent history. The decrease was mainly due to weak sales booking in Bangalore markets, attributed to no launches. Company has achieved 18% of its target sales booking of Rs 27bn for FY15E, which is much lower than 26% of FY14 run-rate the company achieved in Q1FY14. To meet its target of Rs 27bn, company will have to sell on an average Rs 7.4bn worth of sales booking every quarter, which is 10% higher than the highest quarterly sales booking of Rs 6.7bn it achieved in Q4FY13. Hence, to achieve the target would be quite a challenge."

"Sobha’s sales bookings have always suffered when company is not able to launch projects. With lower sales bookings, the cashflows and hence debt levels come under pressure leading to more compelling reason for company to acquire land to launch. The company with land acquisition in place is planning aggressive launch pipeline for balance nine months of FY15E. The company has already launched 0.95msf across two projects in Q2FY15 and expects another atleast 4.2msf of launches for other part of the financial year. Launches in Q2FY15 have already led to an up-tick in the sales booking run-rate, and company is quite confident of achieving the target of FY15E. Maintain Accumulate rating with TP of Rs 475", says Emkay Global Financial Services research.

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