Hold Sobha; target of Rs 490: ICICI Direct

ICICI Direct's research report on Sobha

Sobha's topline grew 1.9% YoY to Rs 658.7 crore (our estimate: Rs 681.4 crore) led by 78.0% YoY growth in revenues from contractual division to Rs 273.2 crore (our estimate: Rs 181.7 crore) The EBITDA margin expanded 198 bps YoY to 21.3%, in line with our estimate of 21.5% despite higher revenue share from the low-margin construction business PAT grew robustly by 22.1% YoY to Rs 61.4 crore (our estimate: Rs 63.1 crore) led by strong EBITDA margin expansion).

Outlook

Hence, we maintain our HOLD recommendation on the stock with a revised SOTP based target price of Rs 490/share.