Buy Sobha; target of Rs 590: ICICI Direct

ICICI Direct's research report on Sobha

Sobha Ltd (Sobha) is a leading real estate player with ongoing real estate projects, ~14.1 mn sq feet of unsold saleable area and ongoing contractual projects aggregating to 3.3 mn sq ft under various stages of construction. As on Q4FY22, the company has delivered ~120 mn sq ft of developable area. The company has a real estate presence in 10 cities, viz. Bengaluru, Gurugram, Chennai, Pune, Coimbatore, Thrissur, Kozhikode, Kochi, Gujarat (Gift City) and Mysore.

Outlook

We maintain HOLD. Despite sharp price correction, muted growth guidance and revisiting contractual business remains an uncertainty. We value Sobha at Rs 590/share, as we incorporate lower volumes, higher cost of capital and 20% discount to NAV.

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