Buy Sobha Ltd; target of Rs 600: JM Financial

JM Financial's research report on Sobha Ltd

Sobha 4Q profit was +42% YoY, on higher revenue recognition during the quarter. Revenue recognition increased by 35% YoY while contractual revenues improved by 24%. Sobha reported fresh sales at INR6.6bn, +7/30% QoQ/YoY respectively, as sales witnessed improvement across Sobha reported fresh sales at INR6.6bn, +7/30% QoQ/YoY respectively, as sales witnessed improvement across regions.

Outlook

We believe Sobha will be a beneficiary of improvement in end-user demand, as sector transparency improves. However execution of land parcels remains critical for significant upside potential. Maintain BUY with TP at INR 600.