Sobha’s Growth Promises Robust Returns by 34%

Sobha Limited, a prominent player in the Indian real estate sector, has witnessed a surge in its stock price following a positive investment outlook from international brokerage firm Investec. The company’s shares saw a substantial 6.31% rise in Wednesday’s trading session, reaching Rs. 1,605, up from a previous close of Rs. 1,514.75. This surge is attributed to Investec’s ‘buy’ rating and an ambitious price target of Rs. 2,150, representing a significant upside potential of 34%.

Investec’s optimistic forecast is driven by Sobha’s impressive financial performance, strong operational cash flows, and strategic plans to expand into high-potential markets such as Mumbai and Noida. The brokerage also forecasts an 18% compounded annual growth rate (CAGR) in Sobha’s pre-sales from FY24 to FY27, bolstered by the company’s robust project pipeline and future land monetisation strategies. Sobha’s contract portfolio remains solid, with a revenue of Rs. 1.64 billion in H1-24, while its manufacturing division continues to generate steady income through key segments, including Glazing & Metal Works, Interiors & Mattresses, and Concrete Products. These verticals support Sobha’s ability to deliver turn-key, high-quality projects.

Looking ahead, Sobha has a vast pipeline of 20.48 million square feet of upcoming projects, spread across regions such as Bengaluru, Gurgaon, Kerala, Noida, Pune, and Tamil Nadu. The company is preparing for the launch of several large-scale developments over the next 6-8 quarters, which are expected to fuel its future revenue and growth prospects. In its recent quarterly results, Sobha posted a notable 26.05% year-on-year (YoY) growth in revenue, reaching Rs. 934 crore in Q2 FY25, compared to Rs. 741 crore in Q2 FY24. Its net profit for the same period saw an impressive 73.33% YoY increase, rising from Rs. 15 crore to Rs. 26 crore. This performance underscores the company’s ability to drive profitability in a competitive market. With an eye on expansion, a strategic project portfolio, and strong financial health, Sobha Limited presents a compelling investment opportunity for those seeking exposure to India’s booming real estate sector.