HDFC Securities has a buy call on the shares of Sobha Limited with a target price of ₹902. The shares are currently trading at ₹ 500.00 levels. This indicates an upside of 80.4%.
Sobha Ltd. reported the highest-ever annual presales of 4.9 million square feet (msf) (+22%
YoY), valued at ₹ 38.7bn. Bengaluru accounted for 68% of total presales volume, but the company expects the contribution to come down to 55% over the next few years.
The company reported a revenue of ₹ 7.3 bn. Real estate contributed 70% to the total revenue. It took a price hike of 6% YoY on average across its portfolio to counter the higher cost of construction. Similar price hikes are expected in FY23.
In the March quarter, Sobha Ltd launched Sobha Brooklyn Towers Wing 3 in Bengaluru, with a saleable area of 0.2msf. The total inventory available for future sale is 27.3msf vs. 27.5msf, as of Dec-21.
It recorded a cash inflow of ₹ 12.9bn this year since it collected the highest ever amount of ₹ 10.6 bn in residential cash collection. As a result, the consolidated net debt reduced to ₹23.4 bn as against ₹ 26.5 bn as of December 2021.
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