Hem Securities report on Sobha
The company improved its net debt to equity ratio from 1.3x in FY21 to 0.9x in FY22. ROCE of the company improved to 27.7% in FY22 from 12.3% in FY21. Consolidated EBITDA stood at Rs.204 cr grew by 36% YoY with margin of 28% (increased by 1% YoY). Revenue for the quarter stood at Rs.731 cr, up 32.15% YoY. Organization anticipates sales momentum to sustain (volume and value during FY23 likely to be flat, low double digit on YoY basis) with improving demand for ready inventories, and newer launches. Board expects revenue in the manufacturing unit to improve to ~Rs.400 crore (at pre-Covid level) during FY23. However, as raw material cost is increasing which will put higher pressure on margins and due to which company is expecting that contractual business unit is likely to witness moderation in FY23.
We initiate BUY rating on stock and value the stock at 21x FY24 earnings to arrive at the target of Rs.594.
At 17:30 Sobha was quoting at Rs 534.00, down Rs 1.15, or 0.21 percent.
It has touched an intraday high of Rs 546.00 and an intraday low of Rs 530.80.
It was trading with volumes of 4,776 shares, compared to its thirty day average of 21,240 shares, a decrease of -77.51 percent.
In the previous trading session, the share closed down 0.48 percent or Rs 2.60 at Rs 535.15.
The share touched its 52-week high Rs 1,045.00 and 52-week low Rs 456.00 on 19 January, 2022 and 28 June, 2021, respectively.
Currently, it is trading 48.93 percent below its 52-week high and 17.04 percent above its 52-week low.
Market capitalisation stands at Rs 5,064.77 crore.
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