Buy Sobha; target of Rs 891: ICICI Direct

ICICI Direct is bullish on Sobha has recommended buy rating on the stock with a target price of Rs 891 in its research report dated July 06, 2023.

Broker Research

July 07, 2023 / 14:09 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Direct's research report on Sobha

Sobha Ltd. (SOBHA) achieved record Q1FY24 gross sales bookings of 1.39msf worth Rs14.7bn (up 28% YoY in value terms), aided by the company achieving its highest-ever gross realisation of Rs10,506/psf. The Bengaluru market clocked 0.84msf or 60% of the quarter’s volumes and 54% of sales value. The strong start to FY24 comes on the back of a strong FY23 operating performance where the company had clocked its best-ever annual sales performance with gross sales bookings of 5.65msf worth Rs52.0bn. The company plans to launch 7-8msf of new projects in FY24, of which 5msf is expected to be in Bengaluru, 1msf in Gurugram and balance in other cities. If the approvals for all the planned launches come through, then the company is targeting 15-20% growth in gross sales bookings for FY24 (we model for sales bookings of Rs57.8bn in FY24E and Rs61.1bn in FY25E). Another key positive in FY23 was the company’s net debt levels reducing by Rs7.0bn to Rs16.4bn (net D/E of 0.66x).

Outlook

We maintain our BUY rating with an unchanged SOTP based TP of Rs891/share. Key risks are demand slowdown and rise in debt levels.

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