Hold Sobha; target of Rs 550: ICICI Direct

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

ICICI Direct's research report on Sobha

Sobha's topline grew robustly by 31.8% YoY to Rs 769.6 crore (our estimate: Rs 704.4 crore) led by 34.7% YoY growth in revenues from real estate division to Rs 501.3 crore (our estimate: Rs 391.9 crore). Also, its contractual revenues grew 23.9% YoY to Rs 268.3 crore (our estimate: Rs 197.4 crore) EBITDA margin contracted 290 bps YoY to 17.7% (our estimate: 20.2%) possibly due to cost escalation booked in real estate division Net profit grew robustly by 39.1% YoY to Rs 65.4 crore (our estimate: Rs 56.3 crore) led by strong topline growth and lower effective tax rate (27.9% in Q4FY18 vs. 39.2% in Q4FY17)

Outlook

Sobha’s sales volumes continued to improve with the company posting volume growth of 20.8% YoY to 3.6 msf. Furthermore, with the demand scenario improving and a slew of new launches lined up, the company expects the sales momentum to improve further. However, we do not foresee any meaningful debt reduction in the near future. Also, the company’s plans to enter new geographies like Ahmedabad, Thiruvananthapuram and Hyderabad needs to be watched closely. Hence, we maintain our HOLD recommendation on the stock with a revised SOTP based target price of Rs 550/share.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More