Buy Sobha; target of Rs 348: HDFC Securities

HDFC Securities' research report on Sobha

Amidst challenging COVID-19 environment, SDL reported operationally robust 1QFY21 with pre-sales of 0.65mn sq ft (-39% YoY) aided by resilient sales in Bengaluru (70% of sales in 1QFY20), lower de-growth 35% YoY (74.5% of sales in 1QFY21). Despite the first half of lQFY21 facing lockdown related issues, total collections for the quarter stood at Rs 5.5bn (-39/-42% YoY/QoQ), this is commendable. Sales activity has picked up in June and trend is flowing into 2QFY21, with SDL indicating a better 2QFY21.

Outlook

Whilst sales inquiries have reached pre-COVID levels, the conversion is yet to happen as buyers want to visit the site physically. We maintain BUY with NAV of Rs 348/sh.

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