Stocks to Buy Today: On 8 November 2023, the financial services firm ICICI Securities published the latest research report on Sobha shares, assigning a ‘buy’ rating to the stock. The comprehensive analysis also provides valuable insights into the company’s financial health.
ICICI Securities is Bullish on Sobha and has recommended a ‘buy’ rating on the stock with a target price of Rs 891. Let’s take a closer look at their recommendations for the Sobha share price target set by ICICI Securities.
Sobha Share Buy Recommendations
Sobha Limited has registered a record-breaking Q2FY24 with gross sales bookings of 1.7 million square feet valued at INR 17.2 billion, marking a 48% year-over-year increase. This surge in sales, especially with over 1 million square feet sold in Bengaluru, comes after the company’s historical performance in FY23. Sobha has already accomplished INR 31.9 billion in gross sales bookings in the first half of FY24.
Management remains optimistic about the demand and plans to introduce 6-7 million square feet of new projects in the second half of FY24, estimated to have a Gross Development Value (GDV) exceeding INR 60 billion. The launch of the Neopolis project in Bengaluru, which spans 3.5 million square feet, kicked off in October 2023.
The company’s sales booking growth guidance of 15-20% for FY24 appears within reach, and projections are set for INR 57.8 billion and INR 61.1 billion for FY24E and FY25E, respectively. A “BUY” rating has been sustained for Sobha with a target price (TP) of INR 891 per share.
The strong operational performance is driven by robust sales in the Bengaluru and Kerala markets, with Kerala contributing 0.27 million square feet of the total bookings in Q2. Despite facing some EBITDA margin pressures due to legacy issues and cost overruns on projects initiated pre-Covid, the company anticipates margin improvement starting Q4FY24.
Additionally, Sobha has successfully reduced its consolidated net debt by INR 1.3 billion in Q2, bringing it down to INR 14.4 billion from a peak of INR 29.8 billion in Q3FY21. However, debt reduction is expected to proceed at a gradual pace given the anticipated rise in land and construction expenses.
- CMP — Rs. 761
- Target — Rs. 891
- Type — Buy
- Report — Click Here
Shareholding Pattern
| Shareholding | Mar ’23 | Jun ’23 | Sep ’23 |
|---|---|---|---|
| Promoters | 52.3% | 52.3% | 52.3% |
| Institutional Investors | 27.4% | 25.0% | 26.2% |
| – Mutual Funds and Others | 11.3% | 9.9% | 12.8% |
| – FIs/Banks | – | – | – |
| – Insurance | 2.4% | 2.4% | 2.2% |
| – FIIs | 13.7% | 12.7% | 11.2% |
| Others | 20.3% | 22.7% | 21.6% |
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